New Mauritius Budget 2025-2026: A Bold Reset for the Nation. 5th June 2025
In the face of what the new government calls an economic wreck left by its predecessor, the Mauritius Budget 2025-2026 boldly declares a national reset.
With debt at 90% of GDP, inflation harming households, and trust in public institutions shaken, this budget aims to steer the country “From Abyss to Prosperity.”
The government's strategy rests on three main pillars: economic renewal, a new social order, and fiscal consolidation. But unlike past austerity measures, this budget balances tough reforms with empathy.
Economic Renewal: Rewiring Growth and Innovation
A new economic model is being launched, focused on investment and productivity instead of consumption. At the heart of this shift is innovation:
- A new National Research and Innovation Institute is being created.
- Artificial Intelligence (AI) will be embedded in government services, education, and business.
- Rs 25 million is earmarked to digitize public administration with AI tools.
- Startups and MSMEs can now deduct up to Rs 150,000 for AI investments.
Tax and Incentive Changes: What Got More Expensive and What Got Cheaper
This year's budget introduces sweeping changes in taxation and incentives:
- Registration Duty for Non-Citizens Buying Property: Increased from 5% to 10%.
- Land Transfer Tax for Sellers: Increased from 5% to 10%.
- Excise Duty on Alcohol and Tobacco: Increased by 10%.
- Excise Duty on Sugary Products: Doubled from 6 cents to 12 cents per gram, now extended to chocolates and ice cream.
- Excise Duty on Hybrid and Electric Vehicles: Re-introduced.
- Registration Fees for Vehicles: Increased by 30%.
- Road Tax (Motor Vehicle Licence Fee): Increased between Rs 200 and Rs 4,000 depending on vehicle type.
- VAT Registration Threshold: Lowered from Rs 6 million to Rs 3 million.
Some relief measures include:
- VAT Removed on infant food, canned vegetables, and frozen vegetables.
- Registration Duty on Pre-Owned Vehicles: Abolished for domestic sales.
- Personal Income Tax Bands Reduced from 11 to 3:
- 0% on income up to Rs 500,000
- 10% on the next Rs 500,000
- 20% on the remainder
Property and Residency
In a significant policy shift, the USD 500,000 scheme that allowed non-citizens to purchase residential property outside approved schemes has been scrapped.
Foreigners must now stick to approved schemes like PDS, IRS, RES, and Smart Cities. Simultaneously, the fiscal incentives for Smart City developers have been eliminated, except for those already under construction.
Social Protection and Housing
Despite fiscal tightening, the budget maintains strong social support:
- A guaranteed minimum monthly income of Rs 20,000 for all full-time workers.
- All pensions increased by Rs 1,000.
- Rs 68 billion allocated for pensions, Rs 90 billion for social protection (35% of the national budget).
- Excise taxes increased to promote public health.
In housing:
- 8,000 social housing units are being repaired before handover.
- Eligibility income threshold for social housing raised from Rs 40,000 to Rs 48,000.
Health and Education
The health budget was raised to Rs 18.5 billion with bold reforms:
- Introduction of telemedicine, digital health records, and AI tools.
- Rs 47 million allocated to a national diabetes reversal program.
- Recruitment of 1,000 student nurses and dozens of specialists.
In education:
- Rs 438 million for educational infrastructure.
- Aims to double the number of foreign students within 3 years.
- A new “Study Mauritius” brand will market Mauritius as an education hub.
Fiscal Consolidation and the “Fair Share” Tax
To stabilize public finances:
- A new Fair Share Contribution of 15% for individuals earning over Rs 12 million.
- Companies with over Rs 24 million in income pay an extra 5%.
- Banks pay an additional 2.5% on domestic profits.
The government vows to reduce public debt to 75% of GDP during its mandate, and ultimately to 60%.
The Big Picture
This budget is not just about numbers; it's about trust. It calls on high earners and corporations to contribute more while protecting the most vulnerable. The approach is unapologetically bold: scrapping outdated privileges, encouraging innovation, and embracing the future—powered by AI, renewable energy, and youth.
In short, Budget 2025-2026 isn't a patchwork fix. It's a comprehensive reboot with eyes firmly on long-term prosperity. The bridge to the future, the government insists, is under construction—and every Mauritian is invited to cross it.
Our VIP Members can download the Mauritius Budget 2025-2026: A Bold Reset for the Nation here.
Scott Oliver is a retired British writer and independent researcher living in Mauritius. A former Royal Marines Commando and former Wall Street investment professional, he has spent more than four decades living and working internationally across 14 countries. During that time, he worked extensively in international wealth management, cross-border asset protection, international business structuring and global residency planning.
Today, Scott's focus is no longer on managing money or providing professional advice. Instead, through MauritiusWealth.mu, he writes independent educational articles designed to help successful African business owners ask better questions, make better decisions and, when appropriate, identify the right expertise to help protect everything they have spent a lifetime building.
His articles are published solely for general educational and informational purposes and should not be regarded as legal, financial, tax, immigration, investment or other professional advice. Every business owner's circumstances are unique, and readers requiring professional assistance should always consult an appropriately qualified and licensed professional.