Tax Arrears Crisis: MRA Faces Rs 25.7 Billion Shortfall

The Mauritian government is grappling with a significant fiscal challenge as total tax arrears reached an estimated Rs 25.7 billion by the end of March 2026, the Prime Minister has revealed.

Responding to a parliamentary inquiry from MP Ram Etwareea, the Prime Minister detailed a concerning outlook for the Mauritius Revenue Authority (MRA), where uncollected revenue continues to mount.

The bulk of the debt is concentrated in Corporate Income Tax, which accounts for a staggering Rs 14.9 billion of the total.

Breakdown of the Debt

The fiscal gap extends across several sectors:

• VAT: Rs 7.1 billion
• Personal Income Tax: Rs 2.8 billion
• CSG (Contribution Sociale Généralisée): Rs 615 million
• Betting and Gambling Taxes: Rs 352 million
• Tax Deduction at Source (TDS): Rs 254 million
• Miscellaneous Taxes: Rs 249 million

According to the Head of Government, Navin Ramgoolam, the accumulation of these arrears is driven by tax returns submitted without full payment, MRA adjustments due to under-reporting, and ongoing legal disputes.

The total bill has been further inflated by the addition of penalties and interest.

The Avago Case

A single high-profile case has become emblematic of the MRA’s difficulties. Avago Technologies Trading Ltd currently owes approximately Rs 6.6 billion.

Although the Assessment Review Committee ruled the sum payable, the company has taken the matter to the Supreme Court without settling the debt.

While the MRA has initiated recovery proceedings, the funds remain frozen in legal contention.

Enforcement and Recovery

To combat the shortfall, the MRA’s Debt Management Unit has intensified its enforcement actions.

The unit is currently using “attachment orders” to seize funds directly from bank accounts and is placing liens on real estate for debts exceeding Rs 200,000.

In an effort to incentivise payments, the government has renewed the Tax Arrears Settlement Scheme, which offers a waiver on penalties and interest for those who pay in full.

Two new initiatives—the Tax Dispute Settlement Scheme and the Voluntary Disclosure Settlement Scheme—have also been introduced.

Collectively, these three programmes have successfully recovered Rs 2.27 billion to date.

The MRA has confirmed it is bolstering its human resources within the debt management division and is developing new tools to accelerate the recovery of the outstanding billions.

Source: l’Express