National Budget 2025 - 2026
Tax, tax.. and tax! This year’s Budget delivers a clear message: the tax burden is rising - especially for banks, high-income earners, and corporates with annual chargeable income exceeding Rs24m. While the reduction in the limitation period for raising assessments is a welcome step toward efficiency and certainty, the introduction of the QDMTT raises serious concerns. As global tax rules tighten, we risk losing the competitive edge that has long attracted international business to our shores.
Introduction of AMT on companies operating in the following specified sectors:
Hotels;
Insurance companies;
Companies engaged in financial intermediation;
Telecommunication companies.
Where the total tax payable by a specified company under the Income Tax Act (ITA) after allowable deductions but prior to foreign tax credits is less than 10% of its book profits, the specified company will be required to pay 10% of its book profits instead of its normal tax payable.
Book profit for the purposes of the AMT will be post adjustments for capital gains/ losses and dividends from resident companies.
The AMT will not apply to holders of a Global Business Licence (GBL) and companies benefiting from income tax exemptions and tax holidays.
No tax credits can be used to offset the AMT.
80% tax exemption now available to licensed Virtual Asset Service Providers on income derived from the exchange, transfer, safekeeping and administration of virtual assets, subject to satisfying prescribed substance conditions.
80% tax exemption not available to banks on foreign source dividend.
An ITC of 5% over 3 years (i.e. 15% in total) will be granted to qualifying small businesses or service providers with an annual turnover not exceeding Rs10m on the acquisition cost of new equipment (excluding motor vehicles) not exceeding Rs500,000 during the period from 01 July 2025 to 30 June 2030.
Unrelieved ITC may be carried forward for 5 years.
Corporate tax exemption granted to the National Guarantee Corporation Ltd.
Corporate tax exemption granted to companies implementing projects whereby at least 50% of the project is financed through grants or concessionary financing from a foreign state or a donor institution.
4-year income tax holiday to SMEs on conversion from sole trader or partnership to company no longer allowed where the SME is:
providing professional services;
a tourism operator; or
a training institution.
The following double deductions will be restricted to SMEs:
emoluments & training costs paid to employees in Rodrigues;
expenditure on the cost of setting up a crèche or Child Day Care Centre;
expenditure on acquisition of patents and franchises;
expenditure on acquisition of specialised software and systems;
expenditure on financing, sponsorship, marketing or distribution costs of a film.
150% deduction of expenditure on filing fees in respect of an application to a recognised arbitration institution in Mauritius restricted to SMEs.
Triple deduction of donation of a maximum of Rs1m to a charitable institution or NGO restricted to SMEs.
Introduction of a monthly Salary Compensation 2025 payable during the period from January to June 2025 as follows:
Introduction of the National Minimum Wage and Salary Compensation 2024 to export-oriented enterprises, irrespective of profitability, as follows:
Renewal of the following allowances and phasing out over the next two years to 30 June 2027:
CSG Income Allowance;
CSG Child Allowance;
CSG School Allowance;
Pregnancy Care Allowance; and
Maternity Allowance.
Abolition of Independence Allowance effective 01 July 2025.
Household members who are beneficiaries under the Social Register of Mauritius (SRM) will continue to benefit from the above allowances. The monthly allowances payable will be as follows:
The following personal reliefs and deductions will be removed:
The VAT registration threshold decreased from Rs6m to Rs3m with effect from 01 October 2025.
Zero-rate VAT extended to:
fruit and vegetable purées for infants;
canned vegetables such as tomatoes and mushroom;
frozen packed vegetables such as potatoes, beans, spinach and mixed vegetables;
hairdressing services; and
CCTV systems
VAT refund on harvesting services will be granted to planters under the VAT Refund Scheme for Small Planters.
The VAT Refund Scheme on the construction of a residential building or the purchase of a residential apartment or house from a property developer will end on 30 June 2025.
Corporates having annual chargeable income above Rs24m will be required to pay a Fair-Share Contribution at the rate of:
5% of chargeable income if they are subject to the standard tax rate of 15%;
5% of chargeable income for banks including on income derived by banks from transactions with non-residents and Global Business Companies; and
2% of chargeable income if they are subject to the reduced tax rate of 3%.
Banks will be required to make an additional contribution of 2.5% of their chargeable income from domestic operations (excluding income derived from transactions with non-residents and Global Business Companies).
companies holding a Global Business Licence;
companies exempt from payment of income tax or which have been granted tax holidays; and
income exempted from income tax.
Renewal of Housing Loan Relief Scheme and phasing out over the next two years to 30 June 2027.
The following schemes under the Registration Duty Act will be discontinued after 30 June 2025:
Home Ownership Scheme
Home Loan Payment Scheme
Registration duty on the acquisition of residential property by non-citizens under EDB schemes will increase from 5% to 10% of property value. The change applies to:
Smart City Scheme
Property Development Scheme (PDS)
Integrated Resort Scheme (IRS)
Real Estate Scheme (RES)
Invest Hotel Scheme (IHS)
Apartments in buildings with at least two floors above ground
Non-citizens selling residential property acquired under the above schemes (or qualifying apartments) will be subject to land transfer tax at the higher of:
10% of the property value, or
30% of the gain realised on the resale.
Where a non-citizen acquires such a property on resale, they will also be liable to the 10% registration duty.
The new rate will apply on deeds registered after publication of the Finance (Miscellaneous Provisions) Act 2025, regardless of prior reservation agreements.
Promoters selling residential units under the above schemes, including qualifying apartments, will now be subject to land transfer tax at 10%, instead of 5%, at time of registration.
New rates of excise/customs duty on vehicles will apply from 6 June 2025 based on engine size and vehicle type (conventional, non-plug-in-hybrid, plug-in hybrid)
Electric cars up to 180KW will attract a duty of 15% and 25% for those above 180kW
A transitional provision will allow previously applicable rates to continue for vehicles already shipped or held in bonded warehouses as at 05 June 2025, provided clearance is completed by 30 June 2025
From 01 July 2025, Registration Duty will be abolished on the sale and transfer of domestic pre-owned vehicles.
For first registrations, duty will be increased by 30%.
The 50% concessional rate previously applied to hybrid and electric vehicles will be abolished and these vehicles will now attract the full amount corresponding to the class of conventional vehicles.
The 3-month and 6-month payment options for licence fees remain available.
A Tourist Fee of €3 per night per tourist will be applicable from 01 October 2025 for stays in
Hotels
Guesthouses
Tourist residences
Domaines
Tourists under 12 years will be exempted from payment of the fee.
The fee will be collected by designated establishments and remitted monthly to the MRA.
From 06 June 2025, the excise duty on sugar content in sweetened products will increase from 6 cents to 12 cents per gramme of sugar.
Additionally, from 01 October 2025, these 12 cents per gramme will also apply to:
Chocolates
Ice cream
Penalties and interest will be capped to 100% of the tax amount due.
Further, penalties and interest for unpaid taxes will be reduced by 50%, provided they do not pertain to withholding taxes collected on behalf of the Government.
A one-off TDSS will be introduced to reduce the backlog of tax cases under dispute or litigation at the Assessment Review Committee (ARC), the Supreme Court (SC) or Privy Council (PC).
Under TDSS, taxpayers who withdraw their cases from the ARC, the SC, or the PC and have outstanding tax claims will be granted a full waiver of penalties and interest.
A second one-off scheme, the VDSS, will be introduced to encourage taxpayers who have undeclared or under-declared income or taxable supplies to come forward and regularise their tax affairs.
Under VDSS, a taxpayer will benefit from a full waiver of penalties and interests.
The VDSS will be available until 31 March 2026, with all payments required by that date.
For income tax purposes, the VDSS will cover undeclared or under-declared income for the Year of Assessment 2024/25 and earlier, excluding returns due in June 2025.
For VAT purposes, the VDSS will apply to undeclared or under-declared taxable supplies for periods ending on or before 30 April 2025.
No tax, penalty, or interest paid will be refundable under this Scheme under any circumstances.
All tax agents will henceforth be required to register with the MRA.
Members of the Mauritius Institute of Professional Accountants and law practitioners will be deemed registered under the law.
Arm’s length test
The scope and methodology of the application of the arm’s length principle will be reviewed.
Tax ruling
The fees payable for a Income Tax ruling will be increased to:
(A) Rs3,000 for an individual; and (B) Rs50,000 for any other person.
Deferred payment in respect of VAT on capital goods
Extension of Objection and Appeal Payment Requirements to Customs Legislation and Excise Act
Failure to provide detailed grounds of objection
A penalty not exceeding 50% and interest at the rate of 0.5% per month will be imposed on excise duty considered unpaid following a stocktaking of excisable goods in a factory.
When Customs issues a tax claim to a manufacturer following a stocktaking of excisable goods, the manufacturer may only appeal through the MRA’s Objection Directorate.
The MRA will have the option to give public notice of the list of excise licences issued, renewed, transferred, cancelled or surrendered at the end of every year through publication in the Government Gazette, a newspaper or in electronic form.