Budget 2026-27 - Consumption: these prices which are falling and those which are increasing

Good news for consumers: VAT remains unchanged in the 2026-2027 Budget. The government is focusing on protecting purchasing power with increased subsidies and price reductions on essential products. On the other hand, alcohol, tobacco, sugary products and drinks in plastic bottles will be taxed more.

While there were fears among the population regarding a possible increase in value added tax (VAT), the Prime Minister and Minister of Finance, Navin Ramgoolam, reassured during the presentation of the 2026-2027 Budget that VAT will not be increased. According to him, it is necessary to preserve the purchasing power of Mauritians in a difficult economic context. Thus, the VAT rate will remain unchanged.

The government announces a new contribution of Rs 2 billion to the Price Stabilization Fund, bringing to Rs 12 billion the overall support aimed at alleviating pressure on prices. This mechanism, put in place to stabilize the cost of essential goods, aims to protect the purchasing power of households in the face of market fluctuations.

In addition, subsidies will be extended to several common consumer products, including canned mutton and beef, canned tuna, baby food, macaroni, black and red lentils, red beans and luncheon meat. These new reduced prices will come into effect from July 1.

From October 1, 2026, the Rs 2 excise currently applied to PET bottles used for beverages will be extended to all plastic bottles, regardless of the product they contain. This decision aims to strengthen the fight against plastic pollution and encourage more responsible consumption.

The government is announcing measures to reduce the cost of living, regulate prices, support households and modernize trade, in particular via new laws and targeted subsidies. Here are the key measures in broad terms:

Candies, fruit jellies, jams, candied fruits, biscuits, waffles, wafers and chewing gum will cost more

Concerning sweet products, several tax adjustments will come into force:

Suttyhudeo Tengur, APEC President:

“From the consumer's point of view, the 2026-2027 Budget obtains 7.5/10 thanks to measures against the cost of living, food security, housing and retirement. It strengthens purchasing power with 2 billion rupees for the Stabilization Fund and expands subsidies for essential products. The STC will purchase basic commodities in bulk and resell them at capped prices, which will reduce prices. Laws against abusive price fixing and control of parallel imports aim to reduce costs. A Retirement Savings Bond at 6% interest encourages saving. No increase in VAT or direct taxes is planned, which