26/07/2026
A Budget Anchored on Taxes, Instead of New Engines of Growth
After carefully reviewing the Finance Bill 2026, one conclusion is unavoidable: the Government's primary strategy is to strengthen public finances through new taxes, broader tax collection, heavier penalties, and expanded enforcement powers for the Mauritius Revenue Authority (MRA).
The new 5% tax on general insurance premiums, the extension of taxes on plastic containers, withholding taxes on certain digital services, wider reporting obligations, and tougher penalties all point in the same direction. The Bill also expands the MRA's access to information relating to water and electricity consumption, insured vehicles, and civil status databases.
In other words, instead of creating more wealth, the focus is increasingly on extracting more revenue from the wealth that already exists.
This is precisely the opposite of the approach I proposed on 12 June 2025, immediately after last year's Budget Speech.
At that time, I presented a Counter-Budget based on new poles of economic development capable of generating sustainable revenue without increasing taxes and without touching the Diego Garcia funds.
These development poles included:
- The Blue Economy
- High-value Financial Services
- The Digital Economy and Artificial Intelligence
- Agro-industry and Food Security
- Sustainable Tourism
- Public Asset Monetisation without selling State assets
- The Circular Economy
- Renewable Energy
- Climate Finance and Resilience
The philosophy was simple: Create new sources of national income before asking taxpayers to pay more.
No country can build long-term prosperity by continuously increasing taxes on insurance, packaging, digital services, businesses, and transactions. Eventually, these costs are passed on to consumers, reducing purchasing power, weakening SMEs, and discouraging investment.
A tax on insurance does not remain on the books of an insurance company. It ultimately appears in the premium paid by motorists, homeowners, shop owners, and businesses.
A tax on packaging does not stay with the importer. It ends up in the price paid by every family.
A withholding tax on digital services risks increasing the cost of software, cloud services, cybersecurity, and online advertising—while Mauritius is simultaneously trying to position itself as a digital economy.
The Government speaks about development, but the Finance Bill reveals a strategy centred primarily on tax mobilisation.
It is always easier to introduce another tax than to build a new economic sector.
It is easier to monitor what citizens spend than to create new export industries.
It is easier to increase penalties than to attract productive investment.
Yet Mauritius possesses extraordinary strengths:
A 2.3 million km² Exclusive Economic Zone, a bilingual workforce, internationally recognised expertise in financial services, ICT, BPO, tourism, renewable energy, and strong commercial links with both Africa and Asia.
These advantages should be transformed into new industries, higher exports, quality jobs, innovation, and sustainable economic growth.
Taxation should support development.
It should never replace development.
I therefore maintain the position I took in 2025: Before looking for new pockets to tax, the Government should have created new engines of wealth.
My Counter-Budget demonstrated that another path was possible with one that could protect the Basic Retirement Pension at 60, honour our social commitments, and generate additional public revenue through productive sectors rather than placing an ever-growing burden on the same taxpayers.
The real debate is not whether Government needs revenue.
Of course it does.
The real question is how that revenue should be created.
Through growth, innovation, investment, exports, and new economic opportunities?
Or through an ever-expanding system of taxes, levies, and penalties?
Unfortunately, the Finance Bill 2026 appears to favour the latter.
A sustainable budget should not simply know how to tax. It must know how to create wealth.
Dave Kissoondoyal