New Delhi, Jan 19 (Inditop.com) Mauritius should not be singled out by India in its attempt to curb tax avoidance as the African nation’s image as a financial haven is ill-placed, according to its visiting Vice Prime Minister Ramakrishna Sithanen.
“Mauritius is definitely not a tax haven,” Sithanen, who holds the portfolios of finance and economic empowerment, told a business roundtable to forge trade and economic ties with India.
“Financial services form just 12.5 percent of our gross domestic product,” he said, also seeking to dispel the notion that his country’s tax holiday policies were being used to re-route money and save on taxes in third countries.
“We have suo moto tried to prevent round-tripping. Till date no case of round-tripping has been brought forward and proved,” said Sithanen.
Round-tripping refers to the practice of investing capital in one country through a subsidiary, which at a later date is then brought back into the original country in the guise of foreign direct investment, which is deemed illegal by many territories.
Sithanen also urged India not to single Mauritius while proceeding with tax treaty reviews aimed at curbing tax evasion.
“India should not single out Mauritius in the tax treaty review. We would like the footprint of Indian companies to increase.”
Sithanen, who leaves for Mumbai Wednesday, met with Finance Minister Pranab Mukherjee, among key ministers and policy-makers during his three-day stay in the national capital.
In the last decade, India received over $80 billion as foreign direct investment, of which more than 40 percent or $35.18 billion came from Mauritius, mainly because it is a “routing point” for foreign companies to avail better tax benefits.
The major foreign investors in India include Singapore, European Union, the US, Japan, Cyprus, and the United Arab Emirates, apart from Mauritius.
Like Mauritius, Cyprus too is a routing point for overseas firms.
India is planning amendments to the Double Taxation Avoidance treaty with Mauritius to prevent its misuse.
