## Mauritius: Selected Issues

_IMF Staff Country Reports, May 28, 2024_

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**Canonical URL:** [Mauritius: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/05/28/mauritius-selected-issues-549634)

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- [Markdown version](/en/publications/cr/issues/2024/05/28/mauritius-selected-issues-549634/index.md)
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## Bibliographic details
- Published: May 28, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400276965.002

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### Key findings
- The tax gap in Mauritius is estimated at 5.6 percent of gross domestic product (GDP), at the top end of tax gaps of its peers.
- Reforming the personal income tax (PIT) and the value added tax (VAT) could altogether yield 3 percent of GDP in additional tax revenue.
- The expected implementation of the global minimum tax on corporations internationally provides an opportunity to reconsider the tax policy approach to investment promotion in Mauritius.
- While there is potential to mobilize additional revenue through tax reforms, care should be taken that vulnerable households are protected, including through compensatory social spending.

### Tax gap and revenue mobilization potential
- Estimated tax gap: 5.6 percent of GDP.
- Potential revenue from PIT and VAT reforms: 3 percent of GDP.
- Both domestic and international taxation reforms could help narrow the tax gap.

### Personal income tax (PIT) and VAT reform options
- PIT reform levers identified:
  - Lowering PIT thresholds.
  - Increasing top PIT rates.
- VAT reform levers identified:
  - Streamlining VAT exemptions.
- Combined effect of PIT and VAT reforms: potential to yield 3 percent of GDP in additional tax revenue.

### Corporate taxation and investment promotion
- Implementation of the global minimum tax on corporations internationally creates a policy window to:
  - Reconsider the tax policy approach to investment promotion in Mauritius.
  - Move away from generous benefits offered, including tax holidays.
  - Shift toward a more neutral taxation of investments.

### Distributional and implementation considerations
- Reforms that mobilize additional revenue should include measures to protect vulnerable households.
- Protective measures could include compensatory social spending to mitigate adverse impacts on households.

*Source: IMF Staff Country Reports — "Mauritius: Selected Issues", May 28, 2024.*

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## Content in this bundle

- **Mauritius: Selected Issues; IMF Country Report No. 24/140; May 1, 2024**
  - [Mauritius: Selected Issues; IMF Country Report No. 24/140; May 1, 2024 (Markdown version)](/-/media/files/publications/cr/2024/english/1musea2024002.pdf.md){rel="alternate" type="text/markdown"}
  - [Mauritius: Selected Issues; IMF Country Report No. 24/140; May 1, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1musea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/05/28/mauritius-selected-issues-549634_