Defending the economy against allegations of tax evasion, Cader Sayed-Hossen, Mauritius Minister of Commerce and Consumer Protection, said that the island nation does not encourage round tripping.
Speaking to the local press on Tuesday on the side-lines of the partnership summit held in Bangalore, India, the minister said that Mauritius, which is the single biggest source of foreign direct investment into India, is extremely well regulated, and considered a “white jurisdiction”.
Institutions such as the Organisation for Economic Co-operation and Development (OECD) and leading global financial institutions regard the Mauritius financial system as “being clean”, he added.
The minister highlighted that while there has been a lot of talk about round tripping by Indian entities operating from Mauritius, nothing has ever been proved.
He noted that Mauritius has always been open about any probe or investigation that Indian authorities would like to initiate about the source of funds flowing in from the island economy.
Mauritius, he stressed, had cooperated to the best of its ability by allowing Indian authorities represented in the joint working group to ‘inspect our books’.
Further, Nikhil Treebhoohun, CEO, Global Finance Mauritius, an apex organisation of the financial services industry, claimed his country had stringent regulations that made it ‘impossible’ to do round tripping from the island economy.
It was difficult for the Mauritius Government to monitor the trail of investments made by Indian entities through a chain of countries, including tax havens, to determine whether round tripping had indeed happened, he said. He instead suggested that the onus was on Indian authorities to determine where Indian entities are investing, just like the Americans do.
Mauritius, for its part, is willing to run the extra mile to be compliant in every way, he stressed.
He concluded by noting that there had been a ‘shift’ in the direction of investments from Mauritius. Till a few years ago, investments to India accounted for about half of outbound investments from that country, but now it was only about 24 per cent, he noted, adding that investments flowing into the African continent had risen to about one-third of the investments from Mauritius.
Shamima Mallam Hassam, a senior director at the Board of Investment (BOI) of Mauritius, said that India and Mauritius had agreed on the contours of a ‘framework’ that would allow the “exchange of information” between tax authorities in the two countries.
A revenue officer of the Central Board of Direct Taxes is present at the Indian High Commission in Mauritius to facilitate tax information exchange, she noted.
Image (via BizTech Africa): Mauritius Minister of Commerce and Consumer Protection Cader Sayed-Hossen said that the island nation does not encourage round tripping.
Source: The Hindu Business Line