Why Mauritius Is Holding Firm on Excise Duties for Hybrid and Electric Vehicles

When the 2025-2026 budget reintroduced excise duties on hybrid and electric vehicles, some motorists hoped the measure might be softened over time. The government has now signalled that the duties are here to stay.

During the post-budget debriefing on Saturday 4 July, Junior Minister of Finance Dhaneshwar Damry set out the reasons for maintaining these duties. His explanation focused less on revenue and more on how Mauritius generates the electricity that powers its vehicles.

The emissions argument

Damry noted that the transport sector accounts for 21.3% of the country's greenhouse gas emissions, making it the second-largest emitter after electricity generation from coal and heavy fuel oil.

His point was that electrifying the vehicle fleet is not enough on its own if the electricity used to charge those vehicles continues to come from fossil fuels. On that reasoning, the environmental benefit of an electric car depends heavily on how the grid behind it is powered.

Vehicle density on the roads

The Junior Minister also highlighted the pressure on the road network. Mauritius now has around 250 vehicles per kilometre of road, compared with a global average of approximately 90.

That figure places the vehicle tax question in a wider context, linking duty policy not only to emissions but to the sheer number of vehicles the island's roads are being asked to carry.

A longer-term plan

Damry framed the current duties as part of a continued transition to a green economy. He said the government intends to keep expanding renewable energy generation so that electric vehicles are increasingly powered by cleaner electricity.

What the duties currently look like

For anyone planning a purchase, the practical question is what these duties amount to today.

Since 6 June 2025, electric cars up to 180 kW attract 15% excise duty, while those above 180 kW attract 25%. Non-plug-in hybrids are charged between 25% and 75% depending on engine capacity, and plug-in hybrids fall between 15% and 55%. These vehicles had been duty-free since the 2022 budget.

The changes extend beyond hybrids and EVs. Conventional petrol and diesel vehicles now face excise and customs duties ranging from 45% to 100%, and the Rs 200,000 rebate under the Negative Excise Duty Scheme was withdrawn from 30 June 2025. You canfind out more about how these layers of tax stack up in our detailed guide.

Where this leaves motorists

The government's position is that hybrid and electric vehicles remain part of the country's future, but that duty concessions will not return while the grid still relies heavily on coal and heavy fuel oil. For buyers, that means understanding the full cost of a vehicle before committing, rather than assuming an electric or hybrid model carries an automatic tax advantage.

AtAutoCloud.mu, we help buyers and sellers make sense of exactly these changes, from valuations and import assistance to finance and insurance, so you can make your next move with the full picture in front of you.