[Blog] Comments on the 2026/2027 Budget, including Pension Reform

Democracy Watch Mauritius had, some time ago, drawn attention to the erosion of purchasing power among the middle-income group. Following the presentation of the 2026/2027 Budget, it has become evident that the Government has once again introduced measures that risk pushing the middle-income group closer to the lower-income bracket.

In this budget, the Government specifically targeted middle-class earners with respect to the Basic Retirement Pension (BRP), declaring that individuals earning Rs 50,000 or more will no longer be entitled to the BRP. This decision clearly demonstrates that the Prime Minister and the Minister of Finance are disregarding the challenges faced by this income group. Democracy Watch wishes to draw the attention of the Prime Minister and the Committee of Experts on BRP to the following points:

1. Many individuals have dedicated their entire working lives to contributing to the progress of the country. During their employment, they contributed to pension funds, which they now rely on in retirement. A significant number of these individuals, who have been benefitting from the BRP, are now over 70 years old. They invested heavily in their children’s education while also saving for a peaceful retirement. At this stage of life, they face substantial medical expenses for themselves and their families. Democracy Watch need not emphasize that the cost of medicines is extremely high.

2. The middle-income group is being further squeezed through heavier taxation. Middle-income families increasingly feel impoverished, while large firms continue to declare huge dividends. There are alternative ways to increase Government revenue.

Democracy Watch proposes that:

*To ensure fairness, the Government should begin BRP reform by increasing taxes on the highest earners — those with regular incomes of Rs 500,000 or more per month.

*The Government should introduce the concept of Mystery Shopping, a well-known management principle. This would involve sending Government employees incognito to establishments such as Medical Practitioners/Specialist, Dentists, Hairdressers, and other service providers who insist on cash payments to avoid income tax. Moreover, they never issue receipts.

3. The Government should also consider reducing the salaries of Ministers and exercise stricter control over missions abroad and delegations undertaken by Ministers and Members of the National Assembly.

The BRP has long been a lifeline for thousands of Mauritians. Democracy Watch makes a heartfelt plea for the Government to reconsider its stance vis-a-vis middle-income earners, especially those who are already drawing a basis retirement pension, on compassionate grounds, thereby enabling them to live with dignity and enjoy a peaceful retirement.