By Rajiv Mangar, Head of Accounting, ONS Finserv
The annual Budget Speech transcends a mere fiscal accounting; it is a strategic blueprint, articulating a nation’s aspirations and charting its course amidst dynamic global currents. The Mauritian Budget 2025/2026, themed “From Abyss to Prosperity: Rebuilding the Bridge to the Future,” embodies this ambition. It’s a comprehensive vision for national transformation, anchored by three pivotal pillars: economic renewal, a new social order, and fiscal consolidation.
From ONS Finserv’s perspective, this Budget presents both significant opportunities and critical challenges. While inherently bold and reform-driven, its success hinges on meticulous execution and robust public-private synergy. It’s a moment for profound reflection and decisive action.
Economic Renewal: Fostering sustainable growth drivers
The economic renewal pillar is the Budget’s cornerstone, signifying a strategic pivot towards sustainable, investment-led expansion. A critical measure addresses persistent workforce shortages through more flexible immigration laws and a revitalised diaspora programme. This proactive stance recognises that a dynamic economy demands an adaptable labour force, vital for innovation and global competitiveness.
The Budget smartly reorients focus from consumption to production, notably within the burgeoning green and blue economies. This trend towards investment-led growth is not merely welcome; it is essential. For Mauritius, a Small Island Developing State, championing sustainable practices is paramount. The imperative for a sustainable tourism model, moving beyond volume to value-added experiences, underscores this foresight, safeguarding our natural assets while enhancing long-term industry resilience.
The financial services sector, a key economic engine, sees encouraging initiatives. Plans for digital trade finance promise enhanced transactional efficiency, crucial for a nimble International Financial Centre (IFC). The launch of bullion banking by the Bank of Mauritius introduces a novel investment avenue, diversifying financial product offerings. Furthermore, simplified licensing for wealth management is a strategic move to bolster Mauritius’ appeal for High-Net-Worth Individuals (HNWIs) and family offices, streamlining global capital attraction.
In manufacturing and commerce, the Budget supports productivity and tech integration. An Industrial Policy Coordination Committee aims to optimise capital productivity, while tax deductions (up to MUR 150,000) for Start-ups and MSMEs investing in AI foster tech-driven manufacturing. Enhanced certification for Mauritian products also bolsters consumer confidence and market reach.
A New Social Order: Building an inclusive and resilient society
The vision for a new social order rests on principles of inclusion, equity, and safety. The Budget’s emphasis on transforming healthcare from a treatment-based model to prevention is a forward-thinking investment in long-term national well-being and productivity. A healthier populace inherently translates to a more resilient and productive workforce. Similarly, strengthening the educational system is fundamental, empowering individuals, equipping the workforce with future-ready skills, and ensuring equitable distribution of economic growth benefits.
Fiscal Consolidation: The essential foundation for stability
While economic renewal and social progress are vital, fiscal consolidation remains the most vulnerable, yet arguably most crucial, pillar. Sustainable economic development necessitates stringent state spending control and fiscal prudence. The Budget boldly commits to embedding accountability, openness, and efficiency into legislation – principles that should be inherent in governance. This explicit commitment signals determination to bolster economic stability and investor confidence.
A significant shift is the progressive phase-out of the unpopular Contribution Sociale Généralisée (CSG) by 2027, balanced by a continued Rs 20,000 minimum income guarantee for full-time employees until June 30, 2027, providing a vital safety net.
On the tax front, key measures include:
- (Re)introduction of Excise Duty & Increased Registration Duty: For hybrid/EVs and first-time vehicle registrations, these measures target revenue and subtly steer consumer behaviour towards greener transport, offset by abolition of duty on pre-owned vehicle transfers.
- Lowering VAT Registration Threshold & Applying VAT to Digital Services: Reducing the VAT threshold to Rs 3 million (from October 1, 2025) and applying VAT to digital services (from January 1, 2026) are pragmatic steps, broadening the tax base to encompass the evolving digital economy.
- Simplified Personal Income Tax Bands: Now 0% (up to Rs 500,000), 10% (next Rs 500,000), and 20% (above Rs 1 million). The exemption for young persons (18-28 years old) earning up to Rs 1 million is a commendable incentive for youth. These changes are expected to remove 44,000 individuals from the tax net and reduce liability for 75,000 more, boosting disposable income.
- Alternative Minimum Tax (AMT) of 10%: A notable shift, applied to book profits for companies in specific domestic sectors (hotels, insurance, financial intermediation, real estate, telecommunications), ensuring fairer contributions. Global business and exempted companies are excluded.
- Global Minimum Tax (15%) in Line with BEPS Pillar 2: From July 1, 2025, this aligns Mauritius with international tax standards, with a Qualified Domestic Minimum Top-Up Tax (QDMTT) ensuring large MNEs reach the 15% effective tax rate. This is significant for our IFC, demonstrating transparency while maintaining competitiveness.
- Discontinuation of Smart City Incentives & Hike in Non-Citizen Property Taxes: These indicate recalibrated government priorities, managing foreign investment in EDB scheme residential properties.
- Tourism Fee of EUR 3: A dedicated revenue stream for sustainable tourism development.
- CSR Fund Flexibility: Allowing corporates to spend up to 50% of their CSR Fund offers greater flexibility.
- Stable VAT Rate: A point of stability for businesses and consumers.
A “solidarity levy” for three years (from July 1, 2025) is a temporary fiscal measure, designed to minimally impact expatriates and the global business sector. It targets high-income individuals (15% for over Rs 12 million annual net income) and domestic enterprises/banks (up to 5% for over Rs 24 million chargeable income), with an additional 2.5% on banks’ domestic operations.
Intriguing tax reforms include reducing assessable years to two, simplifying tax finalisation, and requiring companies with at least 50% foreign currency turnover to pay taxes in foreign currency – impacting foreign exchange management and stability.
Digitalisation and ICT: Powering a smart future
The Budget’s strong commitment to digitalisation and ICT understands that a digitally empowered nation is future-ready. Funds are allocated for a National Research & Innovation Centre (MUR 200m across ministries) for homegrown innovation.
Artificial Intelligence (AI) is a key focus, with MUR 25 million for an AI Innovation Program and Centre, extending to funding AI policy guidelines in schools and universities – a visionary step for future talent. The AI Innovation Start-up Programme further supports the nascent AI ecosystem.
Infrastructure investments include a Tier 4 Government Data Centre for secure digital infrastructure and a National Cyber Operations Centre (UK Modelled) to enhance cyber resilience, vital for a credible IFC. A Price Integrated Monitoring System also aims to enhance consumer wellbeing through price transparency.
Tourism and Culture: Elevating a national asset
The Budget reaffirms tourism’s vital status, allocating a substantial MUR 900 million for development. This includes accelerating the integration of technology, AI, and innovation – signalling that tourism’s future lies in intelligent, data-driven experiences. The planned e-gates facilitate visitor arrivals, enhancing efficiency and guest experience.
Crucially, the Budget shifts towards quality and value-added tourism, moving beyond mere volume to richer experiences. This is intrinsically linked to embracing sustainability challenges, promoting environmentally friendly growth. By fostering practices that preserve Mauritius’ unique natural beauty, we safeguard our appeal. The clear plan to increase tourism spending per visitor, rather than just visitor numbers, reflects a sophisticated understanding of sustainable economic impact.
Furthermore, strategic partnerships with the private sector are essential to address air connectivity, competitiveness, and labour shortages. Collaboration with airlines, hoteliers, and operators will diversify offerings, expand geographical footprint, and grow off-peak arrivals to mitigate seasonality, ensuring a stable, resilient, year-round sector.
Leveraging Mauritius’ fund services infrastructure: ONS Finserv’s strategic role
Mauritius boasts a robust fund services ecosystem – proficient administration, versatile corporate structures, and an expansive global tax treaty network. This positions the Mauritius International Financial Centre (MIFC) as an ideal jurisdiction for channelling global capital.
The Budget reinforces these strengths:
- Fund and Wealth Structuring: MIFC is poised as an unparalleled platform for domiciling cross-border investment vehicles targeting high-growth African and Asian markets.
- GCC–Mauritius Co-Investment Pools: A significant opportunity lies in fostering partnerships with Dubai-based family offices and VCs. These collaborations can strategically channel Gulf Cooperation Council (GCC) capital into African fintech/AI startups via Mauritius-domiciled funds. ONS Finserv, with its established presence in the Dubai International Financial Centre (DIFC), is uniquely positioned to operationalise such strategies, bridging capital, governance, and regulatory frameworks across these dynamic regions.
- Investor-Friendly Regulatory Enhancements: The Budget’s broader commitment to streamlining fund licensing and digital onboarding, aligning with a unified e-licensing and KYC regime, will significantly enhance ease of doing business and streamline global capital inflows, further solidifying Mauritius’ reputation.
Conclusion: A vision for collaborative execution
The 2025/2026 Budget presents a profoundly visionary framework for reinforcing Mauritius as a vibrant IFC and an innovation hub. Its success hinges on diligent execution, deepened public-private synergy, and strategic regional engagement. Our strong ties with partners, particularly in Dubai and across the GCC, will be instrumental in unlocking new investment pathways and driving cross-border collaboration.
At ONS Finserv, we remain steadfast in our commitment to this national endeavour. We believe that by collaborating on AI-forward, digitally enabled financial solutions, and by strategically leveraging Mauritius’ unparalleled infrastructure, we can collectively attract global capital and truly drive the economic transformation envisioned in this forward-looking Budget. The path ahead is challenging, but with clear vision and collaborative action, Mauritius stands poised to redefine its future.
