The report sets out a series of improvements that can be implemented to rationalise the existing structures and mobilise resources for innovation and investment. Based on these insights, the analysis provides suggestions for fiscal policy reform for the next phase of PAGE support in Mauritius.
Major options that were developed for reform are tax instruments applied to fuels used in electricity generation and transport, and reforms to pricing policies pertaining to waste collection and domestic water. Introducing a more comprehensive carbon tax is expected to mobilise US$2.6 million in 2016-2018, progressively increasing to over US$26 million by 2025. Weighting transport fuel excises more heavily on diesel rather than unleaded fuel is expected to raise US$7.8 million per year, with no significant additional burden to taxpayers.
Water costs are very low in the region, compared with regional costs. Based on this, a progressive water tariff is recommended to reflect the true cost of water and promote a more equitable system of sharing the cost of water.
Resources mobilised through the introduction of the reforms outlined can be directed to green economy investments to maximise impact.
The Mauritius Fiscal Policy Analysis represents one part of PAGE’s involvement in Mauritius. The analysis comes at a key moment of PAGE’s involvement in Mauritius. It expected that on the back of this analysis, the government of Mauritius will take into consideration the recommendations for realisation of Mauritius’ green economy ambitions.
To read more about PAGE’s work in Mauritius, click here.