Finance Bill 2025 Reform: 60 Laws, New Taxes, Social Support

Friday 25th July, the National Assembly reviewed the Finance Bill 2025, introduced by Prime Minister and Finance Minister Navin Ramgoolam. Accompanying it were the Rodrigues Regional Assembly (Amendment) Bill and the Economic and Financial Measures (Miscellaneous Provisions) Bill. These legislative proposals aim to overhaul the country’s fiscal, economic, and social policies through a three-part reform: establishing a new resilient economic model, renewing the social pact, and enforcing strict fiscal discipline.

Over 60 laws will be amended under this first bill. Key reforms include strengthening the Financial Services Commission, increasing oversight of offshore entities, and expanding legal protections for regulatory investigators. The Bank of Mauritius Act will also be revised to introduce new tools like bullion banking.

In terms of tax fairness, Ramgoolam announced an increase in the monthly income exemption threshold from Rs 30,000 to Rs 38,462 for employees.

He also proposed a “Fair Share Contribution” of 15% on annual incomes over Rs 12 million, including dividends. This tax, targeting high earners, will apply for three years.

Addressing corporate tax fairness, Ramgoolam pointed out that companies in strategic sectors—such as hospitality, real estate, insurance, and telecom—are not paying their fair share of taxes.

To address this, a 10% Alternative Minimum Tax (AMT) on adjusted profits will be introduced. Additionally, Mauritius will align with OECD standards by implementing a Qualified Domestic Minimum Top-Up Tax for multinationals earning over EUR 750 million annually.

Small and medium-sized enterprises (SMEs) with revenue under Rs 100 million will continue benefiting from specific tax deductions, including those on donations to NGOs.

A new deduction for investments in artificial intelligence technologies will also be introduced.

The government plans to reduce administrative burdens by expanding electronic signatures for official documents, limiting the Mauritius Revenue Authority’s (MRA) audit period to two years, and introducing voluntary compliance schemes that allow taxpayers to settle their dues without penalties or interest.

A revision of the VAT system was also proposed. Foreign digital services providers will need to register for VAT, pay in foreign currency, and file online. Basic necessities like frozen vegetables and baby purees will be VAT-exempt.

A fair contribution rate will be set for companies based on their tax levels, with a ceiling of 35% for banking and telecom sectors.

On social policies, Ramgoolam committed to gradually extending the Generalized Social Contribution (GSC) benefits over two years, maintaining full payments for households on the Social Register.

He announced a monthly support of Rs 10,000 for seniors over 60 who do not qualify for the Basic Retirement Pension but meet income criteria.

The minimum income support will increase from Rs 500 to Rs 1,890 by 2027, ensuring a minimum monthly income of Rs 20,000 for full-time workers. The Equal Chance allowance of Rs 2,000 will be maintained for low-income households.

Sector-specific measures include higher property transfer taxes for foreigners—rising from 5% to 10% starting July 2026—and the introduction of a tourism tax from October 2021.

A USD 400 fee will be levied on each exported primate, with part of the revenue directed to the National Parks Conservation Fund.

Rodrigues’ budget system will be aligned with the central government’s performance-based model starting in 2026-2027.

To enhance fiscal transparency, the government plans to adopt the public sector gross debt as a key indicator, aiming to reduce it to 75% of GDP by 2030 and 60% by 2035.

Amendments to the Statistics Act will ensure the independence and accuracy of official data, with the Director of Statistics Mauritius now legally responsible for data quality.

Source: l”Express