The key highlights of the Mauritius Budget 2025/26:

Mauritius Budget 2025/26: Addressing Challenges with Strategic Reforms

The “From Abyss to Prosperity: Rebuilding the Bridge to the Future” theme of Mauritius’ National Budget 2025/26 signifies a watershed moment in the country’s economic recovery and growth trajectory. Prime Minister Dr. Navinchandra Ramgoolam presented the budget, which focuses on three strategic pillars: economic renewal, a new social order, and fiscal consolidation.

The anticipated GDP for 2025/26 is MUR 769.6 billion, with a real GDP growth rate of 3.7%. The budget deficit is forecast to fall sharply to 4.9% of GDP, down from 9.8% last year, indicating a strong commitment to fiscal discipline. Revenues are expected to be MUR 224 billion, primarily from tax receipts (85%), while expenditures will climb to MUR 261.4 billion, with a focus on social protection, education, health, and infrastructure.

Fiscal Measures

Key budgetary measures include the implementation of a Fair Share Contribution for high-income individuals and corporations, as well as tax reforms such as lower personal income tax brackets and a broader VAT base that includes digital services from international providers. Excise duty rates have been changed, including higher levies on alcohol, tobacco, and sugar-sweetened items.

Significant investment is being directed into renewable energy, education, port expansion, and digital transformation. Tax breaks are being broadened to help SMEs, while a redesigned Smart City Scheme aims to offer targeted fiscal support.

Climate resilience is addressed by allocating MUR 30 billion for renewable energy projects and establishing a specialised Climate Finance Unit.

Overall, the 2025/26 budget represents a forward-thinking approach that strikes a balance between economic revitalisation, social equality, and long-term sustainability, allowing Mauritius to thrive in the face of global uncertainty.

Alcohol and Tobacco

The excise duties on alcoholic beverages and tobacco have been increased by approximately 10%, effective June 6, 2025. The excise on cigarettes has increased from Rs 6,807 to Rs 7,488 per thousand sticks. This not only provides more cash but also aids in the prevention of unhealthy consumption.

Sugar Related Levies

Effective June 6, 2025, the excise charge on sugar content in beverages will quadruple, from 6 to 12 cents per gramme. From October 1, 2025, this tariff will also apply to chocolate and ice cream, in line with public health goals. These approaches are intended to reduce sugar intake while funding larger health programs.

Allowances and Social Support Measures in 2025/26.Why It Matters

Allowances and Social Support Measures in Budget 2025-26:

  • Basic Retirement Pension

From January 2025, retirees will receive an additional MUR 1,000 per month. Furthermore, the eligibility age for pensions is gradually being raised to 65.

  • Guaranteed Income and Equal Chance Allowance

Full-time employees continue to receive a monthly guaranteed minimum pay of MUR 20,000.

The Equal Chance Allowance (MUR 2,000/month for low-income households, < MUR 20,000/month) remains in effect.

  • Social Register Support and New Thresholds

A rise in the income level from MUR 35,000 to MUR 40,000 broadens the breadth of social support.

The government has set aside MUR 660 million for 7,000 families enrolled in the Social Register.

  • Phasing Out of CSG Allowances and Schemes

Annual programs such as CSG Income, Child, School Allowances, and Pregnancy and Maternity Allowances will be phased out gradually by June 2027. However, Social Register beneficiaries remain safeguarded.

Other schemes, including the Independence Allowance, Prime à l’Emploi, Housing Loan Relief, Home Ownership, and Home Loan Payment Schemes, will expire on June 30, 2025.

  • Graduated CSG Allowance (New Structure)

Beginning July 2025, a revised CSG allowance will benefit different income levels:

Monthly salary less than MUR 20,000: MUR 2,000

MUR 20,001–25,000: MUR 1,667.

MUR 25,001–30,000: MUR 1,333.

MUR 30,001-50,000: MUR 1000

The allowance will be halved in July 2026.

Summary and Perspective

These carefully selected allowances demonstrate a shift: maintaining stronger support for low-income families while gradually eliminating earlier, larger subsidies. The implementation of a tiered allowance system provides more targeted relief and is consistent with the government’s aim of consolidating fiscal allocations, all while maintaining social protection for the most needy.