Rada Kistnasamy on Government’s Incentives for FDI in Real Estate
30.09.2017
The most recent Bank of Mauritius figures show an increase in Foreign Direct Investment (FDI). This is supposed to be an indicator of increase in production. The figures for 2016-2017 show Rs15.4 billion. Sounds good. But two-thirds, or Rs10.3 billion has gone straight into real estate. In other words, it has been sent down the drain into gated community projects: Integrated Resort Schemes, Real Estate Schemes, Property Development Schemes, and other real estate like flats disguised by the name of “Smart Cities”. In whose interest if this FDI? That is the question. Is it in the interests of working class people? No, of course, it is not. The MSM/ML Government is encouraging and even subsidizing the land owners, in particular the sugar cane estate bosses, when sugar is in trouble.
Prime Minister Pravind Jugnauth has literally toured the countryside, cutting ribbons for sugar estate bosses and congratulating them for concreting up arable land, and selling it off to millionaires for their swimming pools and golf courses. So, when people are losing jobs in the cane industsry, the bosses are raking in money through selling off the very means of creating jobs.
In his tour de l’ile, Pravind Jugnauth assured the sugar bosses that he will continue on the same path that his father traced in his VISION 2030. To symbolize this, he opened a new motorway for the embellishment of the Mon Tresor Smart City of the Omnicane group. It put back Rs600 million of public funds.
Then Pravind Jugnauth went to the North to vizit Mont Choisy, yet another real estate project being supported by Government. He announced there that the Board of Investment (in his Ministry) has ratified no less than 38 projects. That means another Rs45 billion FDI down the drain. He says this shows investor confidence in Mauritius!
Pravind Jugnauth’s last stop was in the West where he launched Medine Sugar Estate’s UNICITI, a mixture between real estate sales and the business of selling education to the highest bidder. Pravind Jugnauth thanked Medine for ceding land to Government for its Light Rail Project. In fact, the Government ceded Rs83 million from public funds to Medine.
All this, Pravind Jugnauth has found time to get done – in less than a month. Meanwhile the inhabitants of Richelieu, Rose Belle, Moka and St Pierre, peoples’ petitions about dangerous housing have remained ignored. Some have asbestos, which is turning to dust and causing severe illness. Others have houses built without upright structures, and the houses are collapsing on the families living there.
In LALIT we know that this kind of seculation on the value of land is gobbling up huge amounts of capital, and hogging the arable land, while hardly creating work at all. Even bourgeois ideologues who usually defend everything in capitalism are beginning to express concern at the neglect of production, and the rushing into speculation. What is worrying, however, to LALIT, is how often trade union leaders and leaders of supposedly left parties collude so readily with this conversion of good land into “real estate”.
LALIT oposes this kind of supposed “development” that aims to attract billionaries to the country. It is a new form of colonization, even as we approach celebrations for 50 years since Independence.
Here is a list of the huge incentives and direct subsidies the Government offers Real Estate.
Incentives for developing and investing in a project under the Smart City Scheme.
A company investing in the development of a smart city and/or its components is exempted from payment of:
1 Income Tax for a period of 8 years from the issue of the SCS Certificate provided that the income is derived from an activity pertaining to the development and sale, rental or management of immovable property other than an activity in respect of the supply of goods and services.
2 Value Added Tax paid on capital goods (building, structure, plant, machinery or equipment).
3 Customs duty on import or purchase of any dutiable goods, other than furniture, to be used in infrastructure works and construction of building within the Scheme
4 Land Transfer Tax and Registration Duty on transfer of land to a SPV provided that the transferor holds shares in the SPV equivalent to at least the value of the land transferred
5 Land Conversion Tax in respect of the land area earmarked for the development of non-residential components (office and business parks, ICT and innovation clusters, touristic, leisure and entertainment facilities including hotels and golf courses, renewable energy and green initiatives)
6 Morcellement Tax for the subdivision of land.
Other tax incentives
* First-time Mauritian buyers and buyers under the Mauritian Diaspora Scheme acquiring a residential unit will be exempted from registration duty
* Full recovery of VAT in terms of input tax allowable in terms of capital goods (building structure), plant, machinery and equipment
* Accelerated annual allowance granted at a rate of 50% of the costs in respect of capital expenditure incurred by any company operating within the Smart City Scheme on energy-
Residency
* Any person any entity including foreign companies and trusts can acquire residential units in a smart city
* Any non-citizen acquiring a residential unit above USD 500,000 under the scheme is eligible to a residence permit for himself and his family
* No restriction on rental or resale of residential units
* Possibility for a retired person to acquire life rights under the Smart City Scheme.
Mauritian Citizenship
* A non-citizen having held a residence permit for a minimum period of 2 years and having made an investment over USD 5 million in Mauritius may apply for Mauritian citizenship.
Source: http://www.investmauritius.com/investment-opportunities/smart-cities ( Websayt Board of Investment)
