The unveiling of Mauritius’ 2025–2026 national budget signals a pivotal moment in the country’s economic trajectory. As the government strives to balance fiscal discipline with economic revitalization, investors are watching closely to evaluate the emerging risks and opportunities. From tax reforms aligned with global norms to incentives promoting green innovation and digital transformation, Blue Azurite gives you an overview of this budget that maps out a strategic path, albeit one riddled with both promise and complexity.
Tax reforms aligning with global standards
A central pillar of the 2025–2026 budget is a series of tax reforms aimed at improving fairness, strengthening compliance, and bringing Mauritius in line with evolving international standards.
Qualified Domestic Minimum Top-Up Tax (QDMTT)
Starting 1 July 2025, Mauritius will implement a Qualified Domestic Minimum Top-Up Tax (QDMTT) in line with the OECD’s Pillar Two framework. Under this regime, multinational enterprises (MNEs) operating locally will be required to pay a minimum effective tax rate of 15%. The introduction of the QDMTT marks a significant shift, helping to safeguard Mauritius’s tax base amid growing global pressure on low-tax jurisdictions to meet minimum international tax norms.
Alternative Minimum Tax (AMT)
The Alternative Minimum Tax (AMT) is designed to curb aggressive tax planning in key sectors, including hospitality, insurance, finance, and telecommunications. Companies in these sectors will now be subject to a minimum tax of 10% on their book profits to ensure that no profitable enterprise can use excessive deductions or exemptions to avoid contributing to public revenues. The AMT reinforces the principle that all businesses benefiting from the local economy must contribute fairly to its upkeep.
Fair-Share Contribution
To further promote tax equity, the government is introducing a progressive surcharge for companies with chargeable income exceeding Rs 24 million. These high-earning businesses will face an additional tax burden under the Fair-Share Contribution. The measure ensures that larger and more profitable companies play a proportionate role in funding national development, while smaller enterprises remain protected from disproportionate fiscal pressure.
Investment incentives driving growth, innovation, and sustainability
To offset the impact of new tax measures and maintain its appeal to investors, the 2025–2026 budget introduces a targeted package of incentives designed to stimulate capital investment, foster innovation, and accelerate the transition to a greener economy.
Investment Tax Credit
A 15% investment tax credit will now be available to manufacturing companies that invest in new plant and machinery, excluding vehicles. The measure is designed to support industrial modernization, enhance productivity, and create jobs. By encouraging firms to upgrade outdated equipment, the government aims to boost competitiveness in sectors where technological obsolescence has hindered progress.
Support for Small and Medium Enterprises (SMEs)
Recognizing the vital role SMEs play in economic diversification and employment, the budget introduces enhanced support for their growth. Eligible SMEs can now claim double tax deductions on qualifying expenditures related to market research and product development. This initiative enables smaller firms to explore new markets, innovate, and refine their offerings in an increasingly competitive landscape.
Green economy incentives
As part of Mauritius’s ongoing commitment to climate resilience and sustainable development, the budget offers targeted tax breaks for businesses investing in clean energy and environmental projects. This includes incentives for solar and wind energy, as well as energy-efficiency initiatives. These measures not only align with global sustainability goals but also position Mauritius as a destination for environmentally responsible investment, opening up long-term value creation opportunities for companies aligned with green growth strategies.
Where opportunity lies for investors
Mauritius continues to leverage its strategic position between Africa and Asia to attract global capital. The 2025–2026 budget builds on this geographic advantage by focusing on high-potential sectors that align with both local development goals and global investment trends.
Financial services
Mauritius remains a magnet for international finance. Its well-established reputation as a business-friendly jurisdiction is reinforced by a tax framework that includes no capital gains tax, no withholding tax on dividends or interest, and a competitive corporate tax rate ranging from 15% to 17%. These fundamentals, combined with greater regulatory alignment through the newly introduced QDMTT, ensure Mauritius continues to appeal to offshore financial services, fund management firms, and fintech ventures. The country’s deepening compliance with global norms enhances its standing as a transparent, reliable regional financial hub.
Renewable energy
As part of its national energy transition strategy, the government aims to catalyze Rs 15 billion in private investment for renewable energy projects. This opens up substantial opportunities in solar and wind energy, energy storage, and grid modernization. For companies with technical expertise in clean energy infrastructure, Mauritius offers a supportive policy environment and growing demand for scalable, low-carbon solutions. The emphasis on energy security and climate resilience further underscores the sector’s long-term relevance.
ICT and digital transformation
Digitalization remains central to Mauritius’s economic strategy. The government is investing heavily in broadband expansion, data centers, and AI-driven services, with the goal of positioning the island as a regional digital hub. For technology firms, this presents opportunities across a wide spectrum—from software engineering and cloud infrastructure to fintech applications and cybersecurity solutions. The digital economy is not only a growth driver but also a key enabler of transformation across sectors.
Potential challenges for investors
While the 2025–2026 budget sets out a bold roadmap for growth, it also surfaces several risks that warrant close attention from investors and policymakers alike.
Ambitious reforms require capable institutions to carry them through. The success of the budget’s tax and investment measures will depend on timely and effective execution. Yet, recent audit reports have raised concerns about the management of public funds, pointing to weaknesses in administrative capacity and oversight. For investors, sustained confidence will hinge on visible improvements in governance, transparency, and regulatory consistency. Clear signals of institutional accountability will be essential to unlock long-term investment flows.
Moreover, Mauritius’s small and highly open economy leaves it exposed to global market fluctuations. Volatile commodity prices, geopolitical unrest, and persistent international inflation all pose risks to domestic purchasing power and export competitiveness. The economy also remains heavily reliant on external capital and tourism revenues. Any resurgence of global financial instability could dampen investor sentiment and disrupt inflows, placing added stress on both the fiscal and current account balances.
Bottom line
The 2025–2026 budget signals a deliberate shift in Mauritius’s economic direction—toward resilience, innovation, and deeper global integration. By aligning with international tax norms and offering targeted incentives for high-potential sectors, the government is laying the foundation for a more diversified and inclusive growth path.
In this shifting landscape, Blue Azurite stands as a trusted partner for investors looking to enter or expand their footprint in Mauritius. With a deep understanding of local regulatory frameworks, tax compliance requirements, and sector-specific dynamics, Blue Azurite provides customized advisory services designed to translate policy into actionable strategy. Contact us now for more information.
