Mauritius Leaks: A missed attempt to tarnish the Mauritius International Financial Centre!
The group calling itself “ICIJ” in partnership with a local newspaper, has released a spurious report on Mauritius on 23 July 2019, entitled the “Mauritius Leaks”. This self-proclaimed “investigation” was apparently based on a USB key which ICIJ received anonymously, and it is therefore reasonable to assume that the data contained therein may have been illegally obtained. Whilst the ICIJ has admitted that the information did not reveal any illegal activities, the report uses sensational headlines, derogatory statements, half-truths, false and out of context information to put Mauritius in a bad light.
The overall “theme” of the report is the alleged Africa’s revenue loss arising from the use of Mauritius as an International Financial Centre (MIFC). This is a complete fallacy because all the businesses in Africa which are the recipient of FDI through Mauritius pay taxes locally, irrespective of whether the investments are being made from Mauritius. Whilst it is true that one of the effect of a Double Taxation Agreement (DTA) is the provision of certain limited tax incentives, it should not be forgotten that these agreements are bilateral agreements entered into freely by the contracting states. DTAs have a number of benefits which include: the clarity that they provide on taxing rights between states, the sharing of tax between States, the relief of juridical double taxation, allow for international business to be transacted with certainty, better planning through predictability and most importantly prevention of fiscal evasion. These benefits taken together promote and foster economic trade and investment between the two treaty signatories. In fact, there is a demonstrated correlation between DTAs and increase in foreign direct investment and extension of growth and tax revenue. It is therefore of extremely bad faith to suggest that DTAs leads to loss in tax revenue.
As an IFC of repute, the MIFC has positively contributed to the growth of many developing nations in the region. The jurisdiction is instrumental in facilitating the flow of quality FDIs in Africa. This has resulted in the creation of jobs and development of infrastructure and business in these various countries for the benefit of their citizens. Mauritius looks forward to fostering the special relationship that it has with the African continent for mutual benefits. In the aftermath of the ICIJ report, the two key industry associations, ATMC and GFM were quick to issue a communique to denounce the publication of illegally obtained, confidential and privileged information. The government of Mauritius paid heed by the issuance of their own communique which you may access through the below links:
