Revenue estimates

The Mauritius Budget 2026–27 introduces a broad package of VAT reforms aimed at modernising the VAT system, refining the treatment of financial and digital services, supporting priority sectors and simplifying compliance for cross-border businesses. Alongside the legislative proposals, the Government projects continued growth in indirect tax revenues, with Taxes on Goods and Services (principally VAT, excise duties and other consumption taxes) expected to generate Rs 117.459 billion (approximately USD 2.46 billion) in 2026/27—representing around 50% of total recurrent revenue and 59% of total tax revenue, underscoring the central role of consumption taxes in Mauritius’ fiscal framework. Revenue from taxes on goods and services is projected to increase further to Rs 127.814 billion (approximately USD 2.68 billion) by 2028/29. (USD equivalents based on an indicative exchange rate of approximately Rs 47.7 = USD 1.) 

Financial services

The Budget proposes significant changes to the VAT treatment of financial services supplied to the global business sector.

Management services supplied by holders of a Financial Services Commission (FSC) management licence to:

• Global Business Licence (GBL) companies;

• trusts whose settlor and the majority of beneficiaries are non-residents; and

• foundations whose founder and the majority of beneficiaries are non-residents,

will become VAT exempt rather than zero-rated.

Conversely, payment services supplied by holders of a Bank of Mauritius payment service provider licence to GBL companies will become zero-rated, with the stated objective of creating a level playing field between providers operating within the financial services sector.

Digital economy

The Budget introduces a number of important reforms affecting foreign suppliers of digital and electronic services.

Foreign suppliers will no longer be required to register for VAT where they make taxable supplies exclusively to VAT-registered businesses in Mauritius. Instead, such transactions will be subject to the reverse charge mechanism.

The Budget also proposes:

• a VAT registration threshold of Rs 3 million annual taxable turnover for foreign digital suppliers;

• removal of the obligation to appoint a local tax representative for VAT compliance purposes;

• relief from providing customer identification details where disclosure would conflict with confidentiality requirements under the supplier’s home jurisdiction; and

• clarification that online marketplaces and digital platforms are included within the scope of digital or electronic services.

These measures represent a significant simplification of the compliance framework for non-resident digital suppliers while preserving taxation through the reverse charge where business customers are involved.

Goods and services

The Budget proposes several changes to the VAT treatment of specific goods and services, including:

• exemption of electronic books from VAT;

• zero-rating of postal services, replacing the existing VAT exemption;

• zero-rating of common salt, irrespective of whether locally produced or imported;

• clarification that photovoltaic systems, together with photovoltaic generators, panels, batteries and inverters, are not subject to VAT.

Hospitality and tourism

VAT incentives for the tourism and events sector will be expanded.

The existing VAT exemption on accommodation for qualifying international events will be extended to cover:

• certain international sporting events; and

• international television and cinema awards events.

In addition, VAT-registered suppliers of accommodation services in hotels and tourist residences will be required to remit 50% of the VAT collected in foreign currency.

Sports sector

The Budget also contains targeted VAT measures for the sports sector.

It clarifies that the VAT exemption applicable to admission fees for sporting events applies to any sport discipline under the responsibility of a National Sports Federation.

In addition, goods relating to sporting activities received as donations from abroad by National Sports Federations will become VAT exempt.

Charitable organisations

Non-Governmental Organisations (NGOs) and Non-Profit Organisations (NPOs) receiving funding from the National Social Inclusion Foundation under Funding Instrument 1 will be exempt from VAT on goods donated from abroad where those goods are used in carrying out their normal activities.

VAT administration

The Budget proposes a substantial increase in the fees payable for obtaining a VAT ruling:

• individuals: Rs 3,000 to Rs 5,000; and

• companies, Sociétés and trusts: Rs 15,000 to Rs 75,000.