![\"The](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/07\/mauritius.jpeg\")
<\/p>\n <\/p>\n
\n The cityscape of Port Louis, Mauritius.
\n <\/p>\n
Lyvans Boolaky\/Getty Images<\/p>\n
A raft of new corporate taxes that could erode banks\u2019 profitability is testing Mauritius\u2019s long-standing status as a low-tax gateway for cross-border capital, according to Moody\u2019s Ratings.<\/p>\n
Lenders across the Indian Ocean financial hub \u2014 including firms such as Mauritius Commercial Bank and SBM Bank (Mauritius) as well as local units of Standard Chartered, Standard Bank and Absa \u2014 are grappling with a tightening fiscal regime designed to plug domestic budget pressures. <\/p>\n
Authorities overhauled taxes in June 2025 and expanded the measures this year to shore up public finances in the face of rising national debt and increasing social spending. <\/p>\n
Persistent budget deficits \u2014 worsened by external pressures, weak growth and delayed foreign funding \u2014 have inflated the country\u2019s debt to an estimated 88% of the country\u2019s gross domestic product from 64% five years ago. <\/p>\n
The changes have lifted the effective tax rate for foreign-owned banks to as much as 22% from 4.7% previously, and to 32% from 18% for key domestic banks, according to industry estimates.<\/p>\n
\u201cWe\u2019ve seen both higher taxes, but also lower distributions to the population overall, that has impacted both the corporate sector and households,\u201d Christos Theofilou, vice president at Moody\u2019s Ratings, said in an interview. <\/p>\n
The new charges include a 2% corporate climate responsibility levy and a 2.5% tax on chargeable income from domestic operations. The government has also introduced a fair-share contribution on profits, and added a 15% minimum tax for multinational groups to retain revenues from global enterprises within the Indian Ocean island economy.<\/p>\n
The fair-share contribution will help prevent a downgrade for the country\u2019s investment-grade sovereign rating, Premier and Finance Minister Navinchandra Ramgoolam said in his 2025-26 budget speech. <\/p>\n
Financial services are a central pillar of the Mauritian economy, contributing as much as 14% of overall output for the country positioning itself as the leading international financial center for Africa, the Middle East and Asia. <\/p>\n
\u201cThe impact of higher taxes on competitiveness is obviously something that there are concerns around, but on the other hand, the authorities are trying to make the jurisdiction more attractive in terms of non-tax incentives and measures,\u201d Theofilou said.<\/p>\n
Banks are already adapting their businesses to protect margins by ramping up lending and scaling digitisation efforts to boost efficiency. <\/p>\n
Robust capital reserves will also protect profits. Core capital stood at 18.4% by June 2025, nearly triple the 6.5% minimum regulatory requirement.<\/p>\n
\u201cWe expect profitability to remain solid, but to be lower because of the higher taxes,\u201d Theofilou said.<\/p>\n
Newsletter<\/p>\n
Daily\n <\/p>\n
SA Money Daily<\/p>\n
The biggest business, economic and market news of the day.<\/p>\n