COVID-19 Assistance Schemes implemented by the Mauritius Revenue Authority
Country Correspondent – Mukhta Toofannee
The COVID-19 which started in China has swept the whole world by storm and has already hit more than 150 countries. It has created unintended consequences both socially and economically thus prompting governments worldwide to come up with bold measures to support their citizens and the business communities at large.
With the lockdown as from 20 March 2020 in Mauritius to contain the COVID-19, business activities have been put at a halt with the exception of certain essential services. To mitigate the risks of business downfall and loss in employment, the Government has come up with several measures to assist citizens and businesses, two of them being the Wage Assistance Scheme and the Self Employed Assistance Scheme in end March 2020. The implementation of both schemes was entrusted to the Mauritius Revenue Authority.
Wage Assistance Scheme
The Wage Assistance Scheme (WAS) was announced on 23 March 2020 to ensure that all employees in the private sector are duly paid their salary for the month of March 2020, given the lockdown in the second half of that month. The details of the Scheme were as follows:
a) Private sector employers were required to pay the salary to all their employees for March 2020 as per the normal practice and thereafter apply for financial support from Government through the MRA;
(b) The financial contribution from Government was half of the employee’s salary if he/she earns up to Rs 25,000 in a month and Rs 12,500 for those earning between Rs 25,000 and Rs 50,000 monthly. No assistance was extended to employers in respect of their employees earning more than Rs 50,000 monthly;
(c) Exceptionally, where an employer did not have the financial means to effect the payment of the March 2020 salary due to cash flow problems, that employer could apply to the MRA for assistance i.e MRA make funds available to the employer before he/she effects payment of the salary.
Prior to crediting the bank account of the employer in respect of cases under (c) above, the MRA conducts certain checks on the amount claimed using the previous month(s) PAYE and pension contribution returns as a basis for verification.
The MRA is targeting the release of some Rs 2.0 billion under the WAS in respect of the month of March 2020. An amount of Rs 1.4 billion has already been released to some 11,790 employers for some 235,000 employees. All applications, verifications and payment are made electronically.
Self Employed Assistance Scheme
The Self Employed Assistance Scheme (SEAS) provides for the payment of Rs 5,100 to eligible self employed individuals for the period of confinement (20 March-15 April 2020). The amount of Rs 5,100 represents half of the monthly minimum wage in Mauritius. It is open to the following persons who have been in business for the last three months:
a) All self employed in the formal sector, that is, having a Business Registration Number delivered by the relevant authority; and
(b) Economically active persons operating in the informal sector (such as mason, cabinet maker, plumber, hairdresser, artist).
Some self-employed are precluded from applying under the Scheme such as those already benefiting from Government assistance under other welfare programmes (persons receiving basic retirement pension, social benefits, fisherman etc), high income earners with household income exceeding Rs 50,000 in a month and individuals engaged in business where they derive only passive income (rent,
dividend etc).
Online application and automated verification
The MRA has been playing an active role in the design of the SEAS together with Ministry of Finance officials and has put in place the necessary IT, processing and payment infrastructure to receive and verify applications and effect payment to eligible persons. The process followed is summarized below:
(a) All applications are made electronically on the MRA website with the applicant providing relevant identification details, business registration number if any, bank account number (mandatory in initial phase) etc. A one-time password is sent to applicants when proceeding with his/her application to be inserted therein for security reasons;
(b) There are some in-built upfront controls in the online application form itself, through links with the MRA database of third party information, to ensure that non-eligible persons cannot submit an online application. For example, if the National Identity Card Number is invalid or the person is above 60 years, he/she will not be able to proceed further;
(c) The processing of applications is made electronically with further checks being made by the IT system. For example, the system will reject any application where the applicant is a dependent in his spouse’s income tax return, the applicant receives social security benefits from Government or the household income of applicant exceeds Rs 50,000 in a month;
(d) Once an application passes all the electronic controls, it is sent for payment to be made directly into the bank account given by the applicant. As a security measure, in the initial phase, the MRA does not credit the same bank account twice.
Self employed started making applications for SEAS on 1 April 2020 on the MRA website. Within seven working days, the MRA had already processed electronically approximately 165,000 applications, rejected
around 37,000 invalid ones and made payment of Rs 5,100 each to some 128,000 eligible applicants. The number of applications received as at 12 April 2020 stood at almost 200,000 and processing is ongoing.
Given the high number of applications, it was anticipated that many applicants would be calling the MRA to query the status thereof, thereby overloading the customer service hotline or e-mail facilities.
In anticipation of this problem, the MRA decided to provide a facility on the MRA Website to enable any applicant to verify the status of his/her application. If an application is rejected, the applicant is also able to verify the reasons for rejection on this dedicated app.
Lessons learnt
The Director General of the MRA, Mr Sudhamo Lal, labels the implementation of SEAS as the biggest case study in change management at the MRA. He asserts that it took the MRA several years to reach universal e-filing of some 175,000 income tax returns which is submitted mainly by upper middle and high income earners. In a period of 10 days, the MRA has received 176,000 online SEAS applications mainly from low income earners, including many informal sector operators. Mr Lal shares the view that the success of the SEAS can be attributed to providing the right facilities at the right time.
Indeed, there are numerous lessons to be learnt from the implementation of the WAS and the SEAS (mainly), both for the MRA and its counterparts in ATAF. Some of them are highlighted below:
(a) Both Schemes have been designed and implemented during the confinement period, that is, without any IT, Operational Services or Finance staff being physically present in office;
(b) Three-quarters of the applicants under SEAS are not even taxpayers registered on the MRA database. The network of third party information available at the MRA and links with relevant institutions having
individual data was therefore critical for the success of the Scheme;
c) A pool of high quality IT and tax processing professionals, capable of working extended hours, is critical together with an excellent IT infrastructure. At the MRA, the application form was designed with all relevant links and controls inserted therein within less than one day;
(d) Strong leadership, support from decision makers and autonomy given to the revenue administration to put in place and manage the whole process is another ingredient for success.
Working from Home – Tax and Customs
The lockdown due to the COVID-19 has also accelerated the Work from Home concept which was under
pilot implementation in selected departments at the MRA over the last six month. Latest figures indicate that within four working days, a small team of MRA officers from various MRA departments has been constituted and has answered 20,300 e-mails from SEAS applicants by working from home.
At the level of MRA’s Customs Department, in addition to the group of Custom officers who have to be physically present at the ports and airports even during lockdown, there are around 150 staff working from home to clear customs declarations and release consignments on time. For security reasons, access to the Customs Management Information System from remote locations is strictly monitored by the IT Department at MRA Customs.
The recent experience in terms of implementing Assistance Schemes for the Government of Mauritius within tight deadlines and whilst working from home was indeed a tough challenge for the MRA. It is clear that revenue authorities worldwide will face several challenges linked to the COVID-19 situation. Whilst dealing with these challenges for the ultimate benefit of citizens in their respective countries, there will also be opportunities to the tapped by each of them.
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