'Mauritius not a tax haven nation'

NEW DELHI: Denying the charges that double tax avoidance agreement (DTAA) has enabled some people to use Mauritius for reinvesting Indian money back in India to save taxes, vice-PM of Mauritius Rama SITHANEN dismissed the allegation that Mauritius is a tax-haven nation.

SITHANEN said that although it was not required to stop reinvesting Indian money in India under the tax treaty between the two nations, but Mauritius on its own has banned any round tripping of investment of Indian money through a shell company in Mauritius. If any company is found reinvesting Indian money back in India, then its licence to operate from Mauritius is revoked. But, so far not a single case has been found.

He said that Mauritius has implemented the know your client (KYC) norms rigorously. The vice-PM said he has been hearing about Mauritius being used as tax-haven by unscrupulous businessmen, yet he has not received any complaints by Indian authority in this regard.

SITHANEN, who is also finance and economic development minister, in an exclusive interview with TOI said Mauritius is fully compliant of global norms on financial reporting. Following the meeting of the FMs of group of 20 countries, which includes countries like US, UK, India, China and Russia, on the standard of financial reporting in 2004 to contain the menace of terrorism financing, he said, “Mauritius was one of the few countries, which was found fully compliant to the global standard.”

In fact, in the first audit in April 2009, while Mauritius, Jersey and Cyprus were found to be fully compliant of the global standard, countries like Singapore, Switzerland, Austria, Belgium, Luxembourg and Brunei failed to pass the test.

Later, however, Singapore Switzerland, Austria, Belgium and Luxembourg improved their tax standards and joined the group of compliant countries, according to the latest list of the countries released by OECD. However, still some major countries like Malaysia, the Philippines, Uruguay and Brunei failed to meet the global norms.

SITHANEN added that India and Mauritius has already formed a joint working group to look into the ways of improving the information flow among themselves. Mauritius is open to any suggestions to improve the financial reporting between two nations.