THE IMPACT OF BLUE ECONOMY EXPENDITURE ON TAX REVENUE IN MAURITIUS

Abstract

In the the past few years, the Mauritian government has prioritised the development of the blue economy, launching initiatives to establish a robust maritime industry and the dedication of a ministry to handle the activities of the blue economy. In spite of these efforts, financing remains a significant hurdle to expansion with strategic plans put in place, and numerous conferences held to identify workable solutions. With this background, the study sought to assess the impact of the expenditure of blue economy on tax revenue in Mauritius for the period commencing 2016 and ending 2024. A quantitative analytical framework was employed, using the pooled least squares estimation regression model. It has been noted that the pooled least squares estimation regression model may be limitation to the study and not fully account for time dynamics. In future research, panel or time series models such as fixed effects and Autoregressive Distributed Lag model could be adopted because of their robust nature. Also, the analysis could be disaggregated into sub-sectors such as fisheries, shipping, aquaculture and ocean energy. The empirical results revealed that the nature of the nexus between each of the independent variable and the dependent variable. The impact of the expenditure on tax revenue showed a significant positive relationship and some of the variables and negative relationship for other variables. The details have been presented in the body of the article. As a result of the research findings, it was recommended among others that, access to financial resources to targeted groups in the blue economy like small-scale fishers and aquaculture operators is essential for achieving sustainable blue economy at a reduced cost. The development of specialised financial instruments, such as low-interest loans and micro-finance can enhance the growth of the sector and minimise the dependence on revenue from the central government.