In a context marked by high public debt, a widening fiscal deficit, and structural imbalances, the 2025/26 Budget is both a corrective measure and a long-term development plan. It represents a responsible and strategic shift in Mauritius’ economic policy, aiming to stabilise public finances, unlock innovation, and reposition the economy for inclusive and sustainable growth.
A central feature of this Budget is the strong emphasis on innovation and digitalisation. A National Research and Innovation Institute will be established to drive applied research, and Rs 200M has been allocated to support policy-relevant studies across ministries. The new “Innovative Mauritius Scheme” introduces fiscal incentives for research and development, including access to a Premium Investment Certificate.
AI is a strategic priority. A Rs 25 million Public Sector AI Programme will be rolled out, and AI will become a mandatory component in public tertiary education curricula. MSMEs and start-ups will also be able to claim up to Rs 150,000 in tax deductions for AI investments.
The labour market is being modernised through the introduction of Flexible Work Arrangement legislation. The Women Entrepreneur Loan Scheme has been upgraded with the maximum loan rising from Rs 500,000 to Rs 1.2M, and the grace period extended to 18 months. Non-financial support such as mentorship and networking will also be offered. The gig and platform economy is recognised as a legitimate and growing sector of employment.
On the investment front, four “Pôles de Croissance” have been identified namely renewable energy, circular economy, blue economy, and creative industries. These will be supported by simplified permitting, repurposed land use policies, and new diaspora investment incentives. In the financial sector, Mauritius will introduce bullion banking, streamline wealth management licensing, and adopt electronic trade documents. Key financial laws including the Banking Act and Financial Services Act will be revised, and a full Financial Sector Assessment Programme will be conducted with IMF and World Bank support.
To contain fiscal risk, the Government has announced a new Fiscal Responsibility Act and a target to reduce the debt to GDP ratio to 75% by the end of the government’s mandate. Public enterprise reforms are expected to generate savings of around Rs 5Bn, and several underperforming or redundant entities will be closed or merged.
The personal income tax system has been streamlined:
- 0% on income up to Rs 500,000
- 10% on the next Rs 500,000
- 20% beyond Rs 1M
A new Fair Share Contribution has been introduced to ensure that individuals with very high incomes and large, highly profitable companies contribute more equitably to public finances. This includes an additional tax on high income earners and corporations with relatively low effective tax rates. Banks will also be subject to a special levy on their domestic earnings. In addition, an Alternative Minimum Tax (AMT) will apply to selected sectors where companies report substantial profits but pay minimal tax. To broaden the tax base, the VAT registration threshold has been lowered, and foreign digital service providers will now be brought into the VAT system starting next year.
The MRA will also implement a Tax Arrears Settlement Scheme, Voluntary Disclosure Scheme, and reforms to digitalise compliance and strengthen enforcement.
Social development remains a core focus, with Rs 90Bn or 35% of the budget allocated to social protection. Basic pensions will increase by Rs 1,000, while several inefficient subsidies will be phased out gradually over 2 years.
In healthcare, Rs 18.5Bn will be spent on system reform, including AI diagnostics, new hospital management, and a diabetes remission programme. Excise duty on sugary drinks has been doubled, and new products (e.g., chocolates and ice cream) are now taxed.
The education sector receives over Rs 15Bn in funding. Reforms include a focus on STEM, digital skills, micro-credentials, and a new higher education regulator. The “Study Mauritius” initiative is expected to double the international student population.
Public infrastructure remains a key growth driver, with Rs 128Bn earmarked over 5 years for transport, energy, port, and airport projects. Rodrigues will receive Rs 5.8Bn, including Rs 785M in capital investment.
On climate and environmental protection, Rs 30Bn will be mobilised for renewable energy projects, while Rs 3.3Bn is allocated for coastal and biodiversity protection. A new Climate Finance Unit will coordinate international climate funding efforts.
The Government will establish a Future Fund to build long-term national wealth, with receipts from the Chagos deal flowing in from year four. To prevent misuse, strong safeguards will be implemented, addressing past governance issues. The fund will focus on five key areas: food security, clean energy and climate resilience, the blue economy, digital innovation (including AI and blockchain), and equity support for youth and women entrepreneurs.
Finally, public sector reform includes the rationalisation of parastatal bodies, improvements to public financial management, and digitalisation of government services including gazettes, deed registration, licensing, and tax administration.
The Mauritius Budget 2025/26 is a disciplined yet ambitious framework to reset the economy on a more productive, inclusive, and sustainable path. It addresses pressing fiscal vulnerabilities, supports structural reforms, and sets the stage for a smarter, greener, and more resilient Mauritius. It is not just a budget for recovery it is a budget for the future.