“Mauritius Finance”

Mauritius Financial Sector Flags Risk of Investor Flight Amid Rising Tax Burden

In the wake of the 2025/26 National Budget, Mauritius Finance convened leading financial experts to assess the implications for the sector. While acknowledging progress in regulatory modernisation and wealth management, the panel voiced strong concerns over fiscal tightening, calling for urgent clarifications, strategic implementation, and enhanced engagement with authorities. Amid global competition, industry leaders warned that the country risks eroding its attractiveness if reforms are not backed by consistent governance and investor confidence.

Mauritius Finance has voiced sharp concerns over elements of the 2025/2026 Budget, warning that rising tax pressures and gaps in regulatory clarity could undermine the country’s attractiveness as an international financial centre. At a high-level panel convened on 10 June at the Caudan Arts Centre, industry leaders stressed that sound implementation, transparent governance, and dialogue with stakeholders will be critical to avoiding unintended consequences.

Moderated by Shamima Mallam-Hassam, Chairperson of Mauritius Finance and Managing Director of Trident Trust Mauritius Ltd, the session brought together four prominent voices from the sector: Priscilla Balgobin-Bhoyrul (Senior Partner, Dentons Mauritius), Assad Abdullatiff (Managing Director, Axis Fiduciary Ltd), Akshar Maherally (Managing Director, WTS Tax Consulting Mauritius), and Ben Lim (CEO, Intercontinental Trust Ltd).

“Everything hinges on execution”

Ben Lim opened the session by painting a sobering picture of the macroeconomic environment. “We are facing a worrying fiscal deficit and the real risk of a downgrade by agencies such as Moody’s,” he warned. While the objectives of the budget are considered attainable, Ben Lim argued, “everything rests on the ability to transform intentions into concrete action, with strong governance and committed teams.”

AML/CFT Roadmap Welcomed, But Regulatory Gaps Remain

A highlight of the budget—the announcement of a national roadmap to strengthen the anti-money laundering and counter-terrorist financing (AML/CFT) framework—was applauded by Priscilla Balgobin-Bhoyrul. She noted its relevance ahead of the 2027 ESAAMLG mutual evaluation, but warned that “we are technically ready, but uncertainties remain in our regulatory framework—for example, how we define Politically Exposed Persons and the duration of that status.” She called for enhanced engagement with authorities: “We need stronger dialogue to anticipate upcoming requirements.”

Digital Licensing Praised, But Resource Constraints Persist

Participants endorsed the rollout of a new AI-based e-licensing platform as a modernization tool for the sector. However, Assad Abdullatiff cautioned that digital infrastructure alone is insufficient. “This type of project has been announced before, but struggled to materialize due to lack of concrete implementation,” he said.

He underscored the need for better resource allocation and performance oversight: “The solution is to free up resources at the Financial Services Commission and put in place a transparent performance framework.”

Concerns Over Fair Share Contribution and Fiscal Clarity

Fiscal measures came under scrutiny, particularly the new Fair Share Contribution targeting companies with taxable income above MUR 24 million. Though Global Business licence holders are exempt, Akshar Maherally noted that “the status of affiliated entities remains unclear,” adding that this ambiguity requires “urgent clarification.”

On a more positive note, Maherally welcomed the updates to the Partial Exemption Regime: “This announcement is an encouraging signal for our sector, but it must be followed quickly by the publication of substance criteria.”

“In fiscal theory, beyond a certain point, raising tax rates does not necessarily generate more revenue”

Strategic Rollout of Global Tax Reforms Urged

The panel also addressed the implementation of the Qualified Domestic Minimum Top-up Tax (QDMTT) under OECD Pillar 2 rules. Experts called on authorities to proceed carefully to protect Mauritius’s competitiveness. Recommendations included limiting QDMTT to Ultimate Parent Entities (UPEs) in jurisdictions that have already adopted the standard, and introducing the measure via regulation rather than legislation.

A call was also made for the government to publish a stakeholder consultation document to guide international investors and maintain confidence.

“Mauritius is nearing the heavy-tax threshold”

One of the more pointed warnings came from Ben Lim, who highlighted that the effective corporate tax rate may now reach 34%. “This brings Mauritius dangerously close to the high-tax zones like France and the UK, while competitors like Dubai, Jersey and Guernsey continue to offer far more attractive environments for High-Net-Worth Individuals (HNWIs).”

He cautioned that fiscal unpredictability could lead to delayed investment decisions and capital outflows: “Entrepreneurs are increasingly mobile, and the risk of capital flight is real. We need a clear direction and tax policy that supports—not hinders—growth.”

Abdullatiff echoed this concern, adding, “In fiscal theory, beyond a certain point, raising tax rates does not necessarily generate more revenue. On the contrary, heavy taxation can start to reduce state revenues.

Wealth Management Framework Brings Hope

Despite widespread concern over fiscal tightening, a key positive development identified was the planned introduction of a dedicated regulatory framework for wealth management and family offices — a long-standing demand of the financial services community. “This initiative positions Mauritius as a jurisdiction of choice for High-Net-Worth Individuals,” said Priscilla Balgobin-Bhoyrul, who also stressed the need for tailored tax incentives to strengthen the jurisdiction’s appeal.

Promotion Strategy Requires Strategic Realignment

Finally, the panel stressed the need for a strategic realignment of how Mauritius promotes itself globally. “The Economic Development Board must fully embrace its strategic role as the country’s economic promotion agency,” said Ben Lim, who argued for greater international visibility and a dedicated budget to market the financial services sector.

Next Steps

Mauritius Finance has launched a member-wide consultation ahead of the Finance Bill, and is expected to submit a technical report with detailed recommendations to the Ministry of Finance.

About Mauritius Finance

Mauritius Finance is the umbrella body representing more than 180 financial services operators in Mauritius, including management companies, banks, law firms, exchanges, fund managers, and other regulated entities. Its mandate includes advocacy, capacity-building, and engagement with policymakers to support the growth and integrity of the sector.