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AfricaMoney | September 22, 2017

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Mauritius promises ‘full cooperation’ with Indian authorities on tax treaty issues

Mauritius promises ‘full cooperation’ with Indian authorities on tax treaty issues

Despite several rounds of official talks between the two sides about changes in the India-Mauritius Double Taxation Avoidance Agreement (DTAA), the discussions have been hanging fire for a long time, but appear to be on track now, with commitments on both sides at the highest levels to bring talks to a fruitful conclusion. (Image: Narendra Modi Facebook)

“We will cooperate fully with Indian authorities to bring to a fruitful conclusion our discussions on outstanding issues relating to the Double Taxation Avoidance Agreement.”

This resounding statement was made by Mauritius Finance Minister Vishnu Lutchmeenaraidoo in his Budget speech on Monday, March 23, 2015.

Despite several rounds of official talks between the two sides about changes in the India-Mauritius Double Taxation Avoidance Agreement (DTAA), the discussions have been hanging fire for a long time.

Apprehensions persist that Mauritius is being used for round-tripping of funds into India, even though the island nation has always maintained that there has been no concrete evidence of any such misuse. 

Mauritius has been one of the largest sources for foreign direct investment into India during April’14-January’15 with an inflow of INR 46.66 billion (USD 7.62 billion) in the first 10 months of the current fiscal year of India.

“The clear statement made by Prime Minister Modi during his last visit in Mauritius has reassured all stakeholders in the global business sector that India will do nothing to harm this sector,” Lutchmeenaraidoo went on to add in the Budget 2015 announcement.

During the presentation of Budget 2015-16, Vishnu Lutchmeenaraidoo stated that “with the assistance of the Indian Government, Rs 750 million will be invested in the construction of a new airstrip and new jetty facilities for Agalega.”

Furthermore, during the Indian Prime Minister’s visit in March 2015, India and Mauritius agreed to push forward their negotiations for a long pending revision of Double Taxation Avoidance Agreement (DTAA). Both countries agreed that their objective is to prevent the “abuse” of the convention.

Other areas that Narendra Modi considered for collaboration between India and Mauritius were scientific research, security, air transportation, medicine, civil infrastructure projects, petroleum storage, bunkering facility culture and resources for a second Cybercity in Mauritius.

Numerous agreements were concluded, starting with a Memorandum of Understanding (MoU) between Mauritius and India in the field of the ocean economy, followed by cultural cooperation, protocol for the agricultural sector and improvement of sea and air transportation for the Agalega Island.

Finally, the Indian Prime minister sanctioned a USD 500 million line of credit to Mauritius upon his visit.

He noted that India attaches great importance to its relations with the Indian Ocean region, a region of great importance for India, and the visit shall broaden India-Mauritius ties which share the deepest bonds of history and culture.

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