The Mauritius Budget 2025-2026 brings forward a set of bold proposals aimed at reshaping the economic and social landscape of the country. In this summary, we focus on how this budget 2025-2026 measures will impact workers and businesses—two key pillars of national growth and stability. With fiscal consolidation, structural reforms, and strategic investments on the agenda, this year’s budget outlines both opportunities and challenges for entrepreneurs and the labour force. As Mauritius navigates a demanding economic climate, understanding the implications of these policies is crucial for those who drive and sustain the economy.

Summary: Opportunities and Challenges in the Budget 2025-2026

With a focus on strategic investments, innovation, and social inclusion, it presents bold initiatives aimed at driving long-term development. At the same time, the Budget 2025-2026 does not shy away from difficult choices—addressing fiscal imbalances, streamlining public spending, and introducing new taxes to restore financial sustainability.

To better understand the impact of this Budget 2025-2026, we will review its key components in two main aspects:
1. Positive Measures Driving Progress
2. Difficult Decisions and Challenges Ahead

Positive Measures Driving Progress

🌆 Infrastructure & Investment

• Strategic Capital Projects: The PSIP (Public Sector Investment Programme) outlines a 5-year plan focusing on wealth creation, job growth, and protecting the vulnerable.
• Smarter Public Investment: Projects will be centrally appraised for sustainability and impact by the Public Investment Management Unit.
• Investor-Friendly Transparency: PSIP also serves as a planning tool for potential private sector partners.

📈 Economic Modernisation

• A New Economic Path: Structural reforms aim to unlock growth, create quality jobs, and boost productivity.
• Digital Transformation: A national ICT blueprint focuses on operational efficiency and productivity.
• Stronger Data Systems: More funds for open data and a new Tier IV Data Centre to enhance digital resilience.

🤖 Tech & AI Development

• Cybersecurity Upgrade: Targeting top scores on the Global Cybersecurity Index by 2025-2026.
• AI for Progress: New funding, tax reliefs, and educational integration to promote AI innovation.

🏖️ Tourism & Sustainability

• Future-Focused Tourism: A new blueprint prioritises quality, branding, tech, and inclusion, with Rs 900 million allocated.
• Smarter Borders: E-gates to speed up visitor entry at the airport.

🌾 Food Security & Agriculture

• Tech-Driven Farming: Support for SMEs to access AI for food safety and production.
• New Agro Projects: Landscope to use state-owned land for strategic food initiatives.👉 Learn how to start your own agricultural business to take advantage of these new opportunities.

💼 Business & Finance

• Boosting Financial Services: More training, digital licensing, and regulatory improvements to enhance value-added services.
• Incentives for Growth: Seven new investment schemes and support for export-oriented businesses.

🏗️ Infrastructure & Public Works

• Transport & Utilities: The budget 2025-2026 focus major projects like the M4 motorway, drains (Rs 2.4B), and water networks (Rs 3.1B) to spur growth.

💰 Fiscal Sustainability

• Stronger Public Finances: Reforming parastatals, introducing a Future Fund, and targeting lower public debt (down to 60% of GDP long-term).
• Chagos Compensation Utilisation: Funds to repay public debt and invest in strategic sectors.

🧒 Education & Youth

• New Education Blueprint: Big investment in infrastructure and quality assurance. Mauritius aims to become a regional higher education hub.
• Youth & Sports Focus: Rs 1.1B allocated for sports academies, facilities, and athlete support.

🏥 Health & Prevention

• Healthcare Innovation: Focus on prevention and lifestyle changes, plus increased training and better diagnostics.
• Food Safety: Rs 20 million for rapid testing kits.

👪 Social Support & Inclusion

• Stronger Social Net: Continued CSG allowances, raised aid thresholds, and new housing maintenance schemes.
• Assistive & Inclusive Measures: More support for children with special needs, sign language interpreters, and NGO funding.

🏡 Housing Reforms

• Decent Housing for All: Higher eligibility threshold, NHDC contractor accountability, and flood-proofing priority areas.

🌱 Environment & Climate

• Greener Mauritius: Climate finance unit, plastic deposit refunds, stricter noise rules, and “Waste to Wealth” initiatives.

👮 Law & Order

• Zero Tolerance on Drugs: New agency, more funding for anti-drug efforts, and modern screening at ports.

🌍 Outer Islands Development

• Inclusive Development: Rs 5.8B for Rodrigues and Rs 25M for Agalega to improve infrastructure and services.

🧾 Tax & Relief Measures

• Simplified Taxation: Tax reform limits back assessments and removes vehicle registration duty.
• More Relief: Higher exemption thresholds, no VAT hike, and VAT removed on select basic goods.

🎣 Support for Key Groups

• Help for Fishers & Farmers: Better retirement for fishers, price support for sugarcane planters, and a Rs 10B price stabilisation fund.
• Digital Inclusion: Free internet for vulnerable households.

🔮 A Hopeful Outlook

• Balancing Growth with Compassion: Despite fiscal tightening, key social benefits are protected.
• A Strong Foundation: The budget is presented as a bridge to a modern, inclusive, and sustainable Mauritius.

Difficult Decisions and Challenges Ahead

Inherited Crisis

• Government inherited a fragile economy, broken institutions, and deteriorating public finances.

Heavy Debt Burden

• Rs 21.8 billion allocated to debt servicing—funds that could have supported development.

Global Uncertainty

• International tensions, trade wars, and volatility create unpredictable conditions.

Massive Fiscal Slippage

• Previous budget underestimated deficit and debt; real figures were far worse, requiring urgent correction.

Urgent Fiscal Consolidation

• Government faces the need to rebalance spending and increase revenue to restore sustainability.

Cutting Waste

• Audit findings revealed inefficiencies; government prioritises cuts and restructuring.

Public Sector Reform

• Parastatal reforms (e.g., mergers, disinvestments) aim to save Rs 5 billion over 3 years.

MIC Debt Criticised

• MIC decision by previous government added Rs 9 billion to public debt.

Difficult BRP Reform

• In this budget 2025-2026 retirement age to rise to 65 over 5 years to ensure pension sustainability.

Tax and Fee Hikes

• Multiple tax increases (vehicle duties, alcohol, sugar products) and new fees (tourist fee, AMT, QDMTT).

Narrowed Tax Reliefs

• Personal income tax deductions removed; top rate set at 20%; “fair share” levies introduced.

VAT Expansion

• Mandatory VAT registration threshold lowered from Rs 6M to Rs 3M turnover.

Green Incentives Removed

• Hybrid/electric vehicle tax benefits removed; aligned with conventional vehicles.

Key Points on CSG & National Pension Reform

• The CSG system is seen as fiscally unsustainable, with funds reportedly misused for non-pension spending, including electoral allowances.
• A Presidential Commission will propose reforms to the social protection system, including replacing the CSG with a National Pension Fund. A Steering Committee will oversee its implementation.
• While the CSG is being phased out, some allowances (e.g., Revenu Minimum Garantie and Equal Chance Allowance) will be extended to June 2027.
• Other benefits (CSG Income, Child, School, Pregnancy, Maternity) will be phased out over two years, except for SRM households, who will continue to receive full support.
• The Independence Allowance will stop from 1 July 2025, but will continue for SRM (Social Register of Mauritius) households.

Scheme Phase-Outs

• Prime à l’Emploi, housing loan support, and Home Ownership schemes are ending or winding down.

Higher Travel Costs

• Passenger Service Charge (PSC) increased significantly for all travelers.

Education Funding Cuts

• Free tertiary education limited to full-time students; pre-primary and private school grants revised.

End of COVID Support

• COVID-era fee waivers (e.g., port charges) and special funds are being ended or restructured.

Staff Reductions

• Some Ministries show cuts in funded HR posts compared to the previous year.

Lower PSIP Project Values

• Certain project budgets revised downward due to lower-than-expected contract values.

From Crisis to Opportunity: How Budget 2025–2026 Reshapes Business and Worker Priorities

The budget 2025-2026 introduces bold reforms to revive the economy, support workers and businesses, and restore financial stability. Key positives include major investments in infrastructure, education, healthcare, technology, and green initiatives. Strategic sectors like tourism, agriculture, and finance receive targeted support.

However, tough decisions were made to tackle rising debt and fiscal imbalances. These include tax hikes, pension reform, phasing out of several support schemes, and restructuring of public bodies. The government also plans to reduce inefficiencies and cut wasteful spending.

Overall, the budget aims to balance economic growth with long-term sustainability and social inclusion.