Mauritius has embraced the objective of a green economy development path. A number of fiscal instruments for environmental protection and incentives for green investment are already in place. The overall fiscal system is functioning well and revenues from environmentally-related taxes have been increasing. However, there remains potential to rationalize the system to create further fiscal space to sustain green economic development.

This study identifies areas with potential for improvement through the rationalization of current fiscal measures and mobilization of resources for innovation and investment. It sets out options for the reform of tax instruments applied to fuels used in electricity generation and transport, and identifies reforms to pricing policies pertaining to waste collection and domestic water.