The Budget 2026–2027 reshapes personal income tax in Mauritius by introducing a new top band. For high earners, business owners taking large drawings, and anyone planning compensation, the change is important to understand.
This guide explains the new bands and the related personal tax measures. For general rates, see our companion guide on income tax rates in Mauritius 2026.
The new income tax band
The headline change: a new band introduces a 20% rate on the portion of chargeable income exceeding Rs 1 million up to Rs 12 million, and a 35% rate on any chargeable income above Rs 12 million. This new band replaces the fair share contribution for individuals.
| Chargeable income (annual) | Treatment |
|---|---|
| Up to Rs 1 million | Existing rates apply |
| Rs 1 million – Rs 12 million | 20% |
| Above Rs 12 million | 35% |
Because the 35% rate only bites on the portion above Rs 12 million, it is a marginal band — not a flat rate on your whole income.
Related personal tax changes
Several other measures affect individuals:
- The exemption threshold on lump sums received as pension, retiring allowance or severance allowance is raised from Rs 3 million to Rs 3.5 million.
- The disturbance allowance payable to public officers serving on a tour of duty in Rodrigues or the Outer Islands is exempted from tax.
- Monthly income support for persons who have reached 60 but are not eligible for the basic retirement pension rises from Rs 10,000 to Rs 10,370, with effect from 1 January 2026.
What it means for business owners
If you draw a large salary or dividends from your company, the interaction between corporate and personal tax matters more than ever. Splitting remuneration, timing bonuses, and planning lump-sum payments around the higher Rs 3.5 million exemption can all affect your effective rate. Always confirm the specifics with a qualified accountant.
Our free Cost Calculator can help you estimate take-home figures, and the directory of verified accountants can connect you with professional advice.
How it fits the wider budget
This change is part of a broader tax rebalancing in the budget — including a new High-Level Committee, supported by the IMF, to fundamentally review the tax system for fairness and competitiveness. For the full set of 2026 measures, see the Budget 2026–2027 business guide.
Frequently Asked Questions
What is the new top income tax rate in Mauritius?
A new 35% rate applies to chargeable income above Rs 12 million. Income from Rs 1 million to Rs 12 million is taxed at 20%. These bands replace the fair share contribution for individuals.
Is the 35% rate charged on my whole income?
No. It is a marginal band, so the 35% rate applies only to the portion of chargeable income that exceeds Rs 12 million, not to your entire income.
Did the fair share contribution change?
Yes. For individuals, the new income tax band replaces the fair share contribution.
Did the lump-sum exemption change?
Yes. The exemption threshold on lump sums received as pension, retiring allowance or severance allowance is raised from Rs 3 million to Rs 3.5 million.
How can I estimate my new tax?
You can use the free KickOff Cost Calculator to model figures, and consult a verified accountant from our directory to confirm your specific position under the new bands.