Common Tax Mistakes Mauritian SMEs Make (and How to Avoid Penalties)

Every year the MRA publishes reminders about the same handful of SME tax mistakes. Below are the ones we see over and over among Mauritian founders — plus the fix for each.

Mistake 1 — Missing the VAT registration threshold

Businesses often cross the Rs 6M turnover line mid-year and don't register in time. Fix: monitor rolling 12-month turnover monthly.

Mistake 2 — Mixing personal and business bank accounts

This makes deductions impossible to prove. Fix: open a business account from day one.

Mistake 3 — Filing late

5% penalty plus 1% monthly interest. Fix: calendar reminders, or an accountant on retainer.

Mistake 4 — Under-claiming legitimate expenses

Home office, phone, mileage, subscriptions are all deductible in their business share.

Mistake 5 — Forgetting PAYE the first time you hire

Employer registration must precede your first payroll run.

Mistake 6 — Not keeping invoices for 5 years

The MRA can audit up to 5 years back. Digital archives are fine — Google Drive with a monthly folder works.

Mistake 7 — Ignoring the HRDC training refund

1.5% of basic salary is levied — most SMEs can reclaim most of it against training.

Mistake 8 — Treating drawings as expenses

Money you take out of a sole trader business is drawings, not an expense. Deducting it distorts profit and triggers reassessment.

Frequently asked questions

What's the MRA late filing penalty?

5% of tax due plus 1% interest per month.

How far back can the MRA audit?

Typically 5 years, longer in cases of suspected fraud.

Can I reduce penalties?

Voluntary disclosure and prompt payment often reduce interest and penalties. Talk to the MRA before they contact you.

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