JUNE 2025 – MAURITIUS
TAX CHANGES ANNOUNCED IN THE BUDGET SPEECH
It is important that employers note the following:
Budget Speech main measures for the 2025-2026 year of assessment
On 5 June 2025 the Minister of Finance and Economic Development delivered the National Budget Speech for the 2025-2026 financial year, unveiling a series of tax proposals. These proposals have been tabled before Parliament for approval and will be formally gazetted upon adoption.
Highlighted below are the key payroll-related changes emerging from the budget announcement.
Personal income tax rates:
A proposal has been made to restructure the existing individual income tax slabs by introducing revised income thresholds and corresponding tax rates. The number of personal income tax bands will be reduced from eleven to three and will be effective from the income year starting 1 July 2025.
Tax exemption:
Employees earning up to Rs 30,000 per month (Rs 390,000 annually) are currently exempt from income tax. This tax exemption threshold will be increased by Rs 110,000 to Rs 38,462 per month (Rs 500,000 annually).
Personal reliefs and deductions:
The following personal reliefs and deductions will be removed from the income year starting 1 July 2025:
- Deduction of wages paid to household employees;
- Donation to charitable institutions;
- Relief for adoption of animals;
- Angel investor allowance.
Fair share contributions:
This is a temporary tax measure applicable to individuals – specifically high-income earners with an annual net income exceeding Rs 12 million, including dividend income. The contribution is charged at 15% of chargeable income (including dividends) and will be collected through the PAYE system starting 1 July 2025 for a period of three years.
Deduction for dependent child with a disability:
A taxpayer who supports a child with a disability can claim the full tax deduction for that child as a dependent, even if the child also receives financial assistance from the government under the National Pensions Act or the Social Contribution and Social Benefits Act.
Taxation of car benefit:
The taxable values of fringe benefits for employees provided with a company car are being revised as follows:
Other measures announced:
- Allowances such as Revenu Minimum Garantie Allowance and Equal Chance Allowance under the Social Contribution and Social Benefits Act will be phased out gradually until 2027. The amount of the allowance payable monthly will be as follows:
- The following allowances under the Social Contribution and Social Benefits Act, which are set to end on 30 June 2025, will be renewed and gradually phased out over a two-year period, except for household members who are beneficiaries under the Social Register of Mauritius:
- CSG Income Allowance;
- CSG Child Allowance;
- CSG School Allowance;
- Pregnancy Care Allowance; and
- Maternity Allowance.
- The Prime à L’emploi Scheme, which ends on 30 June 2025, will not be renewed.
- The following allowances under the Social Contribution and Social Benefits Act, which are set to end on 30 June 2025, will be renewed and gradually phased out over a two-year period, except for household members who are beneficiaries under the Social Register of Mauritius:
To view the Budget Speech documents, follow the link.
