Budget Brief 2025 / 26
Dr Navinchandra Ramgoolam, Prime Minister and Minister of Finance, presented on Thursday 5 June 2025 the 2025-26 Budget for the Republic of Mauritius. It is the first budget of Dr Ramgoolam’s new Government, which was formed following a historic clean sweep at last November’s General Elections where all the candidates fielded by his coalition were elected. Soon after the elections, a major audit of the country’s finance was conducted and the ensuing report that came out highlighted, amongst other things, that several key economic indicators such as GDP, GDP growth rate, balance of payment etc. needed to be marked down.
As one would have expected, Dr. Ramgoolam’s Budget Speech for 2025-26 is in stark contrast to the budget speeches of the previous regime. It is certainly not a Budget of extravagance but one which is structured around three pillars: Economic Renewal, a New Social Order, and Fiscal Consolidation.
Our Budget Brief for this year focuses on some important measures which we believe will be of particular interest to our clients and readers: financial services sector and business regulatory framework, employment and residency laws, real estate investment and the “third pillar” mentioned by the Prime Minister & Minister of Finance, which is Fiscal Consolidation. The new Government’s pledge to bring down the debt ratio to 75% within this term comes with a series of announcements that will either bring money to the Government’s coffers or save or limit Government’s spending. The most affected by this year’s budgetary measures will be high income earners, corporates, citizens who would see the age for eligibility to basic pension gradually increase from 60 to 65, sellers of properties and car buyers, amongst others. The introduction of the “Fair Share Contribution” is in effect an additional tax of 15% that will concern individuals with a chargeable and locally sourced dividend income above MUR 12 million and an additional tax of 5% on domestic companies with chargeable income above MUR 24 million. Other noteworthy fiscal measures include Alternative Minimum Tax of 10% on the book profits of companies in certain sectors, Qualified Domestic Minimum Top-Up Tax applicable to resident subsidiaries and holding companies of MNEs with consolidated global revenue of EUR 750 million or more, the lowering of the threshold for VAT registration from a turnover of MUR 6 million to MUR 3 million and the lowering of the threshold for the adoption of e-invoicing from a turnover of MUR 100 million to MUR 80 million.
On the positive side, our Global Business clients will be relieved to hear that neither the Fair Share Contribution nor the Alternative Minimum Tax will not apply to the chargeable income of their GBCs. Young earners, including employees and self-employed, aged between 18 and 28 years and earning up to MUR 1 million, will equally be pleased with the full tax exemption granted on their hard-earned income.
We wish you a pleasant reading.