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1 & SEPTEMBER 2014

2 This leaflet is to help you understand the income tax system and how it will affect you when you start your employment. The notes in this Guide are informa ve only and have no legal force. 1. WHAT IS PAYE? PAYE is an amount of money which is withheld from your salary/emoluments by your Employer and remi ed to the MRA each me you are paid. PAYE stands for Pay as You Earn. This means just what it says, you pay your tax as you earn your income. Each me you are paid, the right amount of tax will be withheld from your pay. This amount is determined by basing on the amount of Exemp ons and Reliefs you have claimed in your Employee Declara on Form ( EDF ). 2. WHAT IS EMPLOYEE DECLARATION FROM ( EDF )? At the beginning of an Income Year, the MRA provides EDFs to all registered Employers. The forms are made available through the Employer to all employees to enable them to claim the Income Exemp ons & Reliefs to which they are en tled. 3. WHAT IS INCOME EXEMPTIONS AND RELIEFS? To arrive at chargeable income, an individual is en tled to deduct from his net income the appropriate Income Exemp ons & Reliefs as follows: Income Exemp ons Threshold Category A (employee with no dependent) Rs 275,000 Category B (employee with 1 dependent) Rs 385,000 Category C (employee with 2 dependents) Rs 445,000 Category D (employee with 3 dependents) Rs 485,000 Category E (a re red/disabled person with no dependent) Rs 325,000 Category F (a re red/disabled person with one dependent) Rs 435,000 Other Exemp ons & Reliefs : a) Addi onal exemp on in respect of dependent child pursuing undergraduate course For a child studying at a University: In Mauri us Rs Abroad Rs

3 Note: the addi onal exemp on is not allowable: Where the annual tui on fees, excluding administra on and student union fees, are less than Rs 44500; Where income(including Dividend and Interest received) of an individual or spouse exceeds Rs 2 million; In respect of the same dependent for more than 3 consecu ve years. b) Interest Relief on secured housing loan Rs Eligibility: the person claiming the relief should not already be the owner of a residen al building. c) Relief for medical/health insurance premium as follows: Category of income taxpayer Up to Rs A (No dependent) B (One dependent) for self for dependent C (Two dependents) for self for first dependent for second dependent D (Three dependents) for self for first dependent for second dependent for third dependent E (re red person with no dependent) F (re red person having one dependent) for self for dependent 4. WHO IS A DEPENDENT? Dependent means: a) Spouse b) A child under the age of 18 or c) A child over the age of 18 and who is pursuing full- me course at an educa onal ins tu on or a training ins tu on or who cannot earn a living because of a physical or mental disability. 5. HOW IS PAYE CALCULATED? You have to fill in and submit to your Employer an Employee Declara on Form (EDF), claiming the Exemp ons and Reliefs to which you are en tled. Your Employer will then deduct 1/13 of the Income Exemp ons & Reliefs claimed to obtain the chargeable income on which he will apply the rate of 15%.

4 Employees drawing monthly emoluments not exceeding Rs 20, 800 are not affected by PAYE. In case your emoluments exceed Rs 20, 800 and you have not furnished an EDF to your Employer, tax will be withheld from your emoluments at the flat rate of 15% without any deduc on whatsoever. 6. DOES A NON-CITIZEN HAVE TO FURNISH AN EDF? A non-ci zen who is resident in Mauri us for income tax purposes has to furnish an EDF to his Employer in Mauri us unless his monthly emoluments do not exceed Rs 20, 800. Resident is defined in the Act. In rela on to an individual, it means a person who: a) has his domicile in Mauri us, unless his permanent place of abode is outside Mauri us; b) has been present in Mauri us in that income year, for a period of, or an aggregate period of, 183 days or more; or c) has been present in Mauri us in that income year and the 2 preceding income years, for an ggregate period of 270 days or more. 7. WHAT IF I ALSO HAVE A PART-TIME JOB? Tax is paid on all income earned. If you also have a part- me job, you will be liable to tax at the rate of 15% on your emoluments if it exceeds Rs 20, 800 monthly. 8. WHAT HAPPENS IF I CHANGE MY JOB? It is very important to fill in a fresh EDF to be submi ed to your new Employer when you take a new job. At the end of the year, your previous Employer as well as your new Employer will each give you a Statement, known as Statement of Emoluments and Tax Deduc on, which shows your total emoluments and the PAYE deducted for the year. 9. FILING OF ANNUAL INCOME TAX RETURN A er having filled the EDF at the beginning of the year, the Employee will have to file an Annual Income Tax Form by 31st March of each year to declare all income received during the income year. A er entering the total income received during

5 the year, the Employee shall deduct the total amount of tax withheld under PAYE in the Statement of Emolument and Tax Deduc on given by the Employer. If the total tax withheld is higher than the total tax payable, the Employee shall claim for a refund of the excess. The refund shall be effected either by cheque or credited to the Employee s bank account. Alterna vely, if tax payable is higher than total tax withheld, the employee shall pay the addi onal tax on submission of the return. Note that taxpayers filing their returns electronically and effec ng payment, if any, using Internet Banking, ATM or Mobile Payment have an extended delay up to 15th of April to submit their return. 10. CAN I CLAIM EXPENSES? You can deduct from your total emoluments any transport allowance which is equivalent to the return bus fare between residence and place of work or any traveling allowance to the extent of 25% of your monthly basic salary or Rs 10, 200 whichever the lesser provided that you make use of your private car registered in your name. 11. IN WHAT CIRCUMSTANCES SHALL I HAVE ADDITIONAL TAX TO PAY? You may have to pay addi onal tax if: you have not submi ed a proper EDF PAYE have been wrongly calculated by your Employer You have earned other income during the year 12. WHERE DO I GO FOR ADVICE? If you want any help or advice, please call a) MRA help desk, Ehram Court, Crn Sir Virgil Naz & Mgr Gonin Streets, Port Louis b) Phone on , Fax , Hotline , c) Website: d) headoffice@mra.mu

6 Mauri us Revenue Authority Ehram Court, Cnr Mgr. Gonin & Sir Virgil Naz Streets, Port Louis, Mauri us Tel: Fax: Hotline: Website: