Unveiled on Thursday, June 5, by Prime Minister and Minister of Finance Navin Ramgoolam, the 2025鈥�2026 Budget signals a strategic shift in Mauritius' economic direction. This first budget under the new government comes amid heightened economic strain, with public debt at 90% of GDP and a budget deficit of 9.8%. It introduces a mix of social support, fiscal tightening, and targeted economic stimulus aimed at restoring financial stability while responding to widespread public expectations. Here is a summary of the key measures likely to affect you鈥攚hether you are an investor, a working professional, or a student.
What's new for investors
The government has signaled a clear intent: restore market confidence and increase tax revenues. The focus is on rebalancing the tax system, reassuring investors, and attracting capital aligned with social responsibility and environmental sustainability.
Here are six key measures that could directly impact investors:
- Fair Share Contribution: A special 15% levy will apply to annual net income exceeding Rs 12 million鈥攊ncluding dividends鈥攕tarting July 1, 2025. This measure will remain in effect for three consecutive fiscal years.
- Reform of the Smart Cities programme: The initiative will be restructured to improve project oversight, enhance financial viability, and ensure alignment with current national priorities.
- VAT on foreign digital services: From January 1, 2026, foreign digital service providers will be subject to Mauritian VAT, closing a significant gap in the digital economy's tax framework.
- Tighter conditions on tax incentives: Traditional incentives are being narrowed. Benefits will now target projects that meet ESG (Environmental, Social, and Governance) criteria, particularly in sectors like education and environmental sustainability.
- Opportunities in higher education infrastructure: Projects such as the upcoming university residence in R茅duit could appeal to real estate investors, especially those seeking long-term returns in the education sector.
- Rs 164 million for coastal and ecosystem protection: The budget allocates significant funding for beach restoration and ecosystem preservation, signaling strong government support for environmentally focused projects.
This is not a conventional pro-investor budget. Instead, it represents a recalibration of economic priorities鈥攚here sustainability and equitable tax contributions take precedence over blanket incentives.
Impacts on professionals and businesses
The government has sent clear signals to local economic actors. Priorities are focused on modernizing infrastructure and supporting competitiveness within a revised fiscal framework. Key measures include the following:
AI Start-up Program: Rs 25 million allocated to the public sector, along with a tax deduction of up to Rs 150,000 for start-ups and SMEs investing in AI technologies.
Individual income tax reform with a simplified three-tier system:
- Up to Rs 500,000: Exempt;
- Rs 500,001 to Rs 1 million: 10%;
- Above Rs 1 million: 20%.
Deductions will also be streamlined.
Stricter ESG compliance framework: Businesses will need to adapt their operations to meet new social and environmental obligations.
End of CSG in favor of a National Pension Scheme (NPS): While details are yet to be defined, the reform aims to ensure the long-term sustainability of the retirement system.
Easier work permit issuance for foreigners to address labor shortages and support competitiveness in high-demand sectors.
Note that the government is also doubling down on growth in promising sectors such as health, education, and construction.
Revision of annual vehicle license fees for vehicles registered under commercial names (Category 2 鈥� 鈥淢otor car/Dual-purpose vehicle/Double cab pick-up鈥�):
- Up to 1250 cc: from Rs 4,500 to Rs 5,500;聽聽
- 1251 cc to 1500 cc: from Rs 6,000 to Rs 7,000;
- 1501 cc to 2250 cc: from Rs 9,000 to Rs 11,000;聽聽
- Over 2250 cc: from Rs 14,000 to Rs 16,000.聽聽
For double cab pick-ups under specific uses (Category 3 鈥� e.g., plantations, beekeepers, fishers, small businesses): from Rs 4,000 to Rs 5,000 in Mauritius.
From July 1, 2025, the renewal and payment of the Motor Vehicle License (MVL) for professional vehicles must be done exclusively online via the National Land Transport Authority (NLTA) e-services platform. Please note that no physical renewal will be available at NLTA counters or post offices for this category. The procedure requires vehicle data registration on the NLTA portal, online payment and downloading the new declaration (sticker) after payment validation. A valid Fitness Certificate and any required specific licenses (e.g., Public Service Vehicle Licence - PSVL, Carrier's Licence) are mandatory for MVL renewal. Penalties apply for late renewals: a 50% surcharge on the due amount and potential license suspension.
Social measures and their impact on households
In response to persistent inflationary pressure, the 2025鈥�2026 Budget introduces a series of measures aimed at preserving household purchasing power and addressing essential needs:
Removal of VAT on selected food items, including baby food, canned goods, and frozen products鈥攑roviding immediate relief to families.
Continued targeted assistance, particularly in the energy sector, to mitigate the impact of rising utility tariffs on households.
Revision of vehicle license fees for private vehicles:
- Up to 1250 cc: from Rs 3,500 to Rs 4,500;
- 1251 cc to 1500 cc: from Rs 5,000 to Rs 6,000;
- 1501 cc to 2250 cc: from Rs 8,000 to Rs 10,000;
- Over 2250 cc: from Rs 13,000 to Rs 15,000;
- Classic/vintage vehicles: from Rs 1,000 to Rs 3,000.
Note that as of July 1, 2025, renewal of Motor Vehicle Licenses (MVL) for private vehicles must be completed exclusively online via the NLTA platform. Physical renewals will no longer be accepted at counters or post offices.
Stricter automotive taxation (effective June 6, 2025), including:
- Reinstatement of excise duties on hybrid and electric vehicles;
- Up to 100% increase in duties for combustion engine vehicles;
- 30% rise in registration fees;
- Elimination of resale tax exemptions for used vehicles;
- Annual tax increases by vehicle category.
Fines for noise and black smoke pollution: Rs 10,000 fine for vehicles producing excessive noise or visible emissions鈥攖argeting common sources of household-level nuisance and pollution.
Full subsidy of SC and HSC exam fees, available for first-time candidates, subject to school attendance. Repeat candidates from low-income households will have access to specific financial aid.
Retirement age will be gradually raised to 65 years as part of pension reform and social protection realignment.
Increase in land transfer tax from 5% to 8%, with the objective of curbing real estate speculation and ensuring fairer access to property.
Other noteworthy measures to Note
Tobacco: As of June 6, 2025, excise duties on tobacco products will increase by 10%, leading to price hikes of up to Rs 65, depending on the brand.
Alcoholic beverages: Excise duties on alcoholic drinks will also be revised from June 6, 2025, resulting in higher retail prices for beer, wine, rum, and other spirits.
Sugary products: From June 6, 2025, the sugar tax will double 鈥� rising from 6 to 12 cents per gram of sugar. Starting October 1, 2025, this tax will also apply to two additional product categories: chocolates, ice cream.
A budget rooted in social priorities but not without risks
The 2025鈥�2026 budget marks a clear shift in direction鈥攂alancing fiscal consolidation with a renewed focus on social equity. While it seeks to hold investors and businesses accountable through sustainability standards and more rigorous taxation, it also addresses the immediate pressures facing households, particularly the most vulnerable. In doing so, the budget lays the groundwork for a broader economic transition鈥攐ne in which financial stability and social inclusion must move in tandem to achieve sustainable development in Mauritius.
