Mauritius Budget 2025-2026: What Investors, Expatriates and Professionals Need to Know

Presented on Thursday 5 June by Prime Minister and Finance Minister Navin Ramgoolam, the 2025-2026 Budget sets a significant new direction for national economic strategy. This first exercise by the new government comes in a strained economic climate, with public debt approaching 90% of GDP and a budget deficit of 9.8%. It combines strengthened social measures, tax reform and targeted initiatives to restart the economy while responding to the growing expectations of citizens and investors alike. Here is a full analysis of the measures announced, relevant to foreign investors, professionals established in Mauritius and individuals affected by the reforms.

The Mauritian government reaffirms its intention to strengthen market confidence and to build a more transparent and accountable tax environment. The emphasis is on attracting sustainable investment, tied to the island’s broader social and environmental objectives.

What changes for investors

• Fair Share Contribution: a specific 15% charge on annual net income above Rs 12 million, including dividends. This applies from 1 July 2025 and covers three consecutive tax years.
• Smart Cities programme reoriented: tighter oversight of projects for better alignment with the country’s territorial and environmental priorities.
• VAT on digital services supplied by foreign companies from 1 January 2026: a measure to adapt taxation to the digital economy.
• Tax incentives redefined: only projects embedding ESG standards (governance, social, environmental) in sectors such as education or ecology will qualify for preferential treatment.
• Higher education to the fore: property projects tied to student residences, notably the one at Réduit, open new prospects for investors.
• Rs 164 million dedicated to preserving the coastline and ecosystems: an opportunity for players working in eco-construction and the enhancement of natural heritage.

This budget no longer rests solely on incentive-based tax breaks, but on a logic of sustainable growth aligned with current global concerns.

Productivity, innovation and personal taxation

The Mauritian executive is targeting a recovery in national productivity through a strengthened tax framework, support for innovation and updated regulation on responsible development.

• Support for technological innovation: a Rs 25 million fund is allocated to developing artificial intelligence in the public sector. SMEs and start-ups can benefit from a tax deduction of up to Rs 150,000.

Personal income tax revised:

• Up to Rs 500,000: fully exempt
• From Rs 500,001 to Rs 1 million: taxed at 10%
• Above Rs 1 million: 20%

• New policy on tax deductions: refocused on targeted expenditure, with a view to simplification and transparency.
• Mandatory ESG standards: businesses will have to embed social and environmental criteria in their operations to remain compliant with future regulation.
• Progressive removal of the CSG in favour of the National Pension Fund (NPS): a major transformation of the pension system to secure its financial viability.
• Easier access to work permits for qualified expatriates: a measure intended to fill shortages in sectors in high demand (health, construction, tech).

Annual licence fees adjusted for professional vehicles (category 2):

• Up to 1,250 cc: Rs 5,500
• 1,251 to 1,500 cc: Rs 7,000
• 1,501 to 2,250 cc: Rs 11,000
• Over 2,250 cc: Rs 16,000
• Double-cab pickup for specific use: Rs 5,000

Motor vehicle licence (MVL) renewals will be exclusively digital from 1 July 2025, with penalties applied automatically for any delay.

Household purchasing power and everyday costs

Against a background of continuing price rises, the government is putting targeted policies in place to protect households and stabilise essential spending.

• VAT removed on a selection of essential goods: baby food, canned goods and frozen products are covered.
• Energy consumption support schemes extended to limit the effects of inflation.

MVL rates updated for private vehicles:

• Up to 1,250 cc: Rs 4,500
• 1,251 to 1,500 cc: Rs 6,000
• 1,501 to 2,250 cc: Rs 10,000
• Over 2,250 cc: Rs 15,000
• Classic or vintage vehicles: Rs 3,000

Vehicle taxation tightened from 6 June 2025:

• Excise duty restored on clean vehicles
• Registration fees up 30%
• Increases of up to 100% for combustion-engine vehicles
• End of exemptions on second-hand vehicle resales

Social measures, property and consumption taxes

• Fines introduced for noise nuisance and air pollution (black smoke), set at Rs 10,000.
• SC and HSC examination fees covered for pupils meeting attendance criteria. Additional support for pupils from vulnerable households in the event of a repeated year.
• The statutory retirement age raised progressively, reaching 65.
• Tax on property transfers raised from 5% to 8% in order to discourage speculative transactions.
• Tobacco products: excise duty up 10% from 6 June 2025. Retail prices will rise by around Rs 65 depending on the brand.
• Alcohol: taxes revised upwards on alcoholic drinks, affecting beers, wines, rums and spirits.
• Sugary products: the levy rises from 6 to 12 cents per gram of sugar. It will extend to ice cream and chocolate products from 1 October 2025.