Mauritius tries to resolve tax issues with India to boost economy
Rajeshsharma Ramloll, the newly appointed Chairperson at FSC, Mauritius, is rooting for a speedy resolution of issues related to the Indo-Mauritius tax treaty to restore investor confidence and ensure certainty. (Image: Economic Times)
Seeking to dispel Indian concerns about Mauritius being used for round-tripping and tax evasion, the island’s Financial Services Commission (FSC) is looking for a quick resolution of tax-related issues between the two countries.
“A quick resolution of issues related to the Indo-Mauritius tax treaty would not only benefit the two nations but also boost investor confidence and ensure certainty,” said Rajeshsharma Ramloll, the newly appointed Chairperson of the FSC, Mauritius’ premier regulator of non-banking financial services.
Amid apprehensions in India that Mauritius is being used for money laundering activities, proposed revisions to the bilateral tax treaty have met with unexpected and inordinate delay.
“The issues relating to the Indo-Mauritius tax treaty need to be resolved quickly. A quick resolution will not only benefit both countries, but also ensure certainty, clarity and predictability and boost investor confidence…that are much required for both countries,” said Ramloll.
Stressing the fact that Mauritius has taken many steps to address India’s concerns, Ramloll said the island nation is an economical and efficient route for routing investments into India.
He further added that Mauritius provides stability, predictability and security for investors, besides value added services.
“For this reason, I believe that companies using Mauritius to invest in India do not do so only because of the Double Taxation Avoidance Agreement but also because Mauritius is a respectable and competitive International Financial Centre providing a complete package of financial services,” Ramloll said.
Set up in 2001, FSC is the integrated regulator for all non-banking financial services and global business sectors in Mauritius, which has been a major route for foreign investments coming into India.
However, Mauritius was dethroned by Singapore as the top source of Foreign Direct Investment (FDI) into India this year, with the Asia Pacific island economy accounting for 25% of FDI inflows into the emerging Asian economy in 2013-14.
During the last financial year, India has attracted USD 4.85 billion in FDI from Mauritius compared to USD 5.98 billion from Singapore, according to data from the Department of Industrial Policy and Promotion (DIPP).
Meanwhile, cumulative FDI equity inflows from Mauritius to India have touched $79,014.05 million from April, 2000 to April 2014.
Besides the tax treaty, both nations have inked a Bilateral Investment Promotion and Protection Agreement, whereby India has been the largest exporter of goods and services to Mauritius since 2007.
Talking about the measures in place to address India’s concerns on round tripping and tax evasion, Ramloll said that more stringent licensing conditions have been put in place to ensure that Indian sourced funds are not re-invested in India through Mauritius.
For better exchange of information between the two nations, an Indian Revenue Department officer has been posted at the High Commission in Port Louis, he added.
Finally, during his visit to India in May, Prime Minister Navin Ramgoolam said Mauritius has decided to provide automatic exchange of tax related information with India.
Source: Press Trust of India