Concern over tax evasion: India, Mauritius vow to early pact

NEW DELHI: Amid concerns over Mauritius being used as a major route for avoidance of taxes on investments by Indian companies, Prime Minister Manmohan Singh and his counterpart Navinchandra Ramgoolam today agreed on early conclusion of an agreement aimed at tackling this menace.

The two leaders reviewed the status of negotiations on the revised Double Taxation Avoidance Agreement (DTAA) during their talks here and directed officials to fast-forward talks in this regard.

The issue of DTAA came up among several other issues during the talks between Singh and Ramgoolam which included security cooperation and enhanced economic ties.

India announced a new economic package to Mauritius consisting of a Line of Credit of USD 250 million and a grant of USD 20 million. Five pacts were also signed covering the fields of education, textiles, sports and science and technology.

In a statement to the media after the talks, Singh said the two leaders reviewed the status of implementation of the revised DTAA Convention.

"Both India and Mauritius have an interest in ensuring that there is no misuse of the Convention," he said, adding "we are happy that the Joint Working Group on this Convention has resumed its work and held a meeting recently in Port Louis in December 2011."

He said the two leaders directed officials to continue their work "towards finding a mutually-acceptable and satisfactory solution to the issues that concern us at the earliest".

A joint statement said, "Both sides agreed to continue discussions at an early date with a view to reaching a mutually agreeable outcome."