Critical Analysis: Mauritius' Role as a Tax Haven and its Implications

This report provides a critical assessment of Mauritius as a tax haven, examining its economic, monetary, and taxation environment. It analyzes the laws and regulations shaping Mauritius's policies, including Double Tax Agreements (DTAs) with various nations, and the impact on its economic stability. The report investigates governmental plans, the requirements of local citizens and organizations, and recent changes in monetary, economic, and taxation policies. It also explores the problem of Mauritius being a trading hub due to lower tax rates and its implications, such as fiscal deficits in other nations. The study aims to identify legal terms, taxation legislations, and governmental plans for controlling the economic environment, along with the effectiveness of DTA agreements. The report also reviews the framework of OECD and the plans and policies imposed by banks like the Bank of Mauritius (BOM) and Central banks, and analyzes the charges and legislations levied on income. The conclusion will provide recommendations and suggestions for future research, contributing to a deeper understanding of Mauritius's role in the global financial landscape.

A Critical Assessment of
Mauritius as a Tax Heaven

TABLE OF CONTENTS
ACKNOWLEDGEMENT...............................................................................................................2
Declaration of Originality................................................................................................................3
ABSTRACT.....................................................................................................................................4
CHAPTER 1: INTRODUCTION....................................................................................................1
Overview.....................................................................................................................................1
Background.................................................................................................................................1
Problem statement.......................................................................................................................2
Rationale behind study................................................................................................................2
Aim and Objectives.....................................................................................................................3
Research Questions.....................................................................................................................3
Importance of study....................................................................................................................3
Research structure.......................................................................................................................4
Conclusion..................................................................................................................................5
CHAPTER 2: LITERATURE REVIEW.........................................................................................6
2.1 Introduction to literature review............................................................................................6
2.2 Government plans and policies in economic control............................................................6
2.3 Current requirement of local citizens and organisation in Mauritius..................................12
2.4 Recent variations in monetary, economic and taxation policies.........................................13
2.5 Suggestions for reforms and taxation controlling techniques to government.....................15
2.6 Limitation of literature review............................................................................................15
2.7 Conclusion..........................................................................................................................16
CHAPTER 3: RESEARCH MERTHODOLOGY.........................................................................17
Introduction...............................................................................................................................17
Research Philosophy.................................................................................................................17
Research Technique..................................................................................................................17
Data collection..........................................................................................................................18
Data analysis.............................................................................................................................19
Ethical consideration.................................................................................................................19
Reliability and Validity.............................................................................................................20
Research Limitation..................................................................................................................20
CHAPTER 4: DATA ANALYSIS................................................................................................21
4.1 Introduction.........................................................................................................................21
4.2 Results.................................................................................................................................21
4.3 Governmental plans and policies in economic control at Mauritius...................................21
4.4 DTA agreements of Mauritius with several nations...........................................................23
4.5 Requirement of local citizens and corporate industries......................................................25
4.6 Monetary system in Mauritius............................................................................................25
4.7 Economical and taxation policies in Mauritius...................................................................26
4.8 Reforms which are needed to be made by government......................................................27
Conclusion................................................................................................................................28
CHAPTER 5: RECOMMENDATION AND CONCLUSION.....................................................29
Introduction...............................................................................................................................29
Conclusion................................................................................................................................29
Recommendations.....................................................................................................................29
Suggestion for the next research...............................................................................................30

REFERENCES..............................................................................................................................31
APPENDIX....................................................................................................................................35

ACKNOWLEDGEMENT
This research study has enhanced my level of research skills and learning ability. I have learnt
various techniques and operational tasks which has improvement loyalty and commitment
towards analyzing the best of information through this research.
Firstly, I would like to thank all my friends and family members in bringing me the
support for contributing efforts in making adequate study over the facts. My tutor___ had given
me the opportunity to perform the research and guided me in favorable way for attaining success.
At last, I would like to thank to all those individuals who have presented their views and
supported me in collecting all relevant and appropriate information base on research issues.

Declaration of Originality
I hereby confirmed that, the below listed thesis and collection of information has been made by
myself. I have completed all the research work such as data collection, research methodology
and preparing literature with authentic sources. The whole process has been under consideration
or determination of by supervisors with respect of using reliable sources and presenting correct
information. Further, I have committed none of plagiarised activities while preparing the data
base. Similarly, all the methods which have been used in research has been documented by
myself in this report. There is no use of any manipulated sources of information which lead
research on wrong direction. Considering all the ethical and legal requirements I have prepared
this data base.

ABSTRACT
This study has been based on analyzing the economical, monetary and taxation environment
in Mauritius. There has been determination of all the laws and regulation which plays the main
role in designing and developing policies in Mauritius. Various DTA agreements have been
addressed as per having better operational control and management of operations. This report
will be based on analyzing various issues and operations. India has been suffering from Fiscal
deficit as economic stability is comparatively poor than Mauritius. Lending funds to nation as
well as making higher foreign investment in that particular country will be challenging for
Mauritius in making suitable balance in operations. There have been various economic benefits
which have been obtained by other countries in making inappropriate determination of operation.
Taxation laws and regulations must be determined, which has huge variations and differentiation
in various nations. The economic policies and governmental plans must be analysed in Mauritius
as per appropriate changes to be made in each business operation. Mauritius has recently had
higher gains, strong growth which indicates its high ere GDP rates. It was 3.46% in 2015 while
in present it is 73.4% rise. Thus, the rapid growth in GDP and the economic level of this nation is
basically due to liberal and open economic policies. It encourages and welcome foreign countries
in making investments at large sectors in economy. management of the financial, revenue and
monetary system in Mauritius it is necessary to have satisfactory management of each operations
that will be adequate and helpful in making better execution of each operations. Developing the
various legal aspects in the country mainly relevant with the social progress, good governance,
economic development etc.

CHAPTER 1: INTRODUCTION
Overview
Mauritius is known as taxation bliss for various other nations. It influences various Double
Tax Agreement (DTA) among Mauritius and other nations. It is done on the basis of revenue
earned by an individual or corporation on the basis of dividends, interest, capital gains and
royalties. These are the conventions which have been signed by China, India, Vienna and UN for
appropriate trade practices with the influences of proper legislations. There has been various
remedies and taxation exemption which were being awarded to the nations which are engaged in
such contractual agreements. Revenue gathered by a person or business will not being double
taxed and have dual legislation on it has effective adequacy on the operations.
This chapter will bring a satisfactory suggestion based on making qualitative
improvement in various taxation issues and regulations imposed by government of Mauritius that
will be helpful for making proper changes in operational control and business management. This
study will be take into account various rulings of OECD for taxation system as well as for better
BEPS legislation for rules. There will be analysis on the internal plans and policies for balancing
the economic stability which has been regulated and administered by the Bank of Mauritius,
Central banks etc.
Background
Mauritius has been treated as tax haven in world with motive of having satisfactory
taxation rates. Mauritius has effective economic strength which is known as tax haven in the
world. Liberal economic regime can result in apparent paradox as the population of this tiny
speck is around 1.2 million but economy wise, it one-hundredth to India. Therefore, in relation
with the same, it can be said that it has the accurate GDP rate as well as per capita income. It is
the largest exporter of capital to Indian economy. This is most suitable source for India in
relation with generating the adequate amount of funds for operations and it funnels investors in
making foreign direct investment facilities in India.
Mauritius gained benefits due to quasi tax system, which have facilitated the financial
regime that is competent and various characteristics impact and uplift overall operational
requirements of entity. As per considering various rules and regulations which were being
enacted by Mauritian government which relates with making taxation process smooth and
1

soothing for residentials and for the foreign residents. There has been various DTA agreements
which were held among nations that are engaged in trade practices with Mauritius. This
contractual agreement held between Mauritius, China and India will be discussed in the
following study. Impacts of rules and regulation imposed by Mauritius Revenue Authority
(MRA) has effective control over monetary system, economic environment and the currency
exchange rates in country.
Problem statement
In the recent years Mauritius has become the trading hub for many countries. It is due to
lower rates and charges imposed by the government ion the exports and imports. Considering
such issues which has have affected national economy of Mauritius such as huge manipulation of
money. This nation has been criticised and it is always in the controversial news because it is the
largest capital lender to India which is affecting national economy (Morabito, Carosin and
Vandenbroeck, 2017). India has been suffering from Fiscal deficit as economic stability is
comparatively poor than Mauritius.
Lending funds to nation as well as making higher foreign investment in that particular
country will be challenging for Mauritius. Precisely, there has been influences of various laws,
regulation and acts which in turn has have affected the efficiency of the market as well as
currency rates. Mauritius has been lending various grants and taxable benefits to the several
nation including India, China, Vienna and UN which has become challenging inn balancing the
financial crack down.
Rationale behind study
Analysing reasons behind the research study is that it will enhance information and
knowledge regarding taxation policies, schemes and recent governmental changes in operations
in Mauritius. Determination of governmental regulation plans in improving the tax implications
in trade practices as well as income generated by individuals as per having better operational
gains (Beebeejaun, 2018).
Moreover, scholars will be beneficial in determining the legislative operations performed
by Mauritian government in context with protecting the nation from financial crackdowns.
Controlling monetary system as well as economical viabilities of the firm which will bring

balances in the operations. Concerning impacts of taxation reforms in the country which have
affected economy as well as trade practices. Managing the firm with appropriate determination
of all the issues and activities will be better in evaluating the governmental plans and policies.
Aim and Objectives
Aim: “To identify laws and regulations in Mauritius taxation environment and impacts over
other nation”
Objectives:
 To analyse the governmental plans and policies in economic control
 To demonstrate current requirement of local citizens and organisation in Mauritius
 To identify the recent variations in monetary, economical and taxation plan on nation
 To suggest the appropriate changes and variations which are needed to be adopted by
government for controlling taxation
Research Questions
 What are the legal terms and issues which Mauritian government must consider for
controlling financial breakdowns?
 What are the reasons behind Mauritius becoming tax bliss to other nation?
 What are the major taxation legislations, legal authorities and governmental plans for
controlling economic environment in Mauritius?
 How are DTA agreements be effective in taxational planning and executing economical
practices between Mauritius and contracting nations?
Importance of study
This study will be beneficial in enhancing the learning and knowledge of scholars with
considering Mauritian legislations, laws, rule and acts. The framework of OECD with context of
various convention based on DTA agreement will be analysed. It consists of contractual
agreement that have been signed by various nations with Mauritius for effective taxation
policies. Implementing various plans and policies which were being imposed by banks such as
Bank of Mauritius (BOM) and Central banks. These have influences in making monetary and
economic planning which will be appropriate for effective environmental development.

Emphasising on the operational framework and activities of legislative authorities listed
in Mauritius for bringing suitable execution on the duties and activities performed by entities and
individual with the context of retaining favourable amount of earning. Analysing the charges and
legislation levied on the income generated by them through various sources will be addressed
and analysed by the scholars. This research project will bring benefits in making adequate
examination over obstacles and issues.
Research structure
Chapter 1: Introduction
This chapter consists of all the brief details relevant with research aim, objectives and
rationale of study (Nel, 2017). This will provide a proper framework for the study, that in turn
guides the scholar in analysing satisfactory reasons behind all research issues. It will also bring
an overview to Mauritius taxation law and regulation, which will be adequate in making control
over each operation. This chapter is an outlook for the whole report and also, it describes areas
which were going to be studied in study. Researchers will be helpful in determining effective
information and details relevant with the facts.
Chapter 2: Literature review
This chapter will be based on various arguments and debated that have been presented by
the researchers with highlighting the literature on issues. Taxation environment of Mauritius will
be analysed as per having determination of all issues and operations (Kotha, 2017). Debates have
been based on current issues and recent requirements of the business in making determination of
operations practices. Discussion will be based on various reforms and the changes which are
needed to be made in taxation planning of government. This chapter is comprised of all
information based on approaches, theories and models which highlight lights on all issues and
activities. It Influences opinion of various authors and philosophers about research issues, which
will be discussed and administered to have generation of information.
Chapter 3: Research methodology
This chapter consists of information regarding methods of study to be followed by
scholars. It will bring them a framework in addressing issues as well as developing the best
examination in addressing issues. To analyse environmental wants and needs, there will be
determination of all issues through effective methodology to be used in the considerations (Avi-
Yonah and Mazzoni, 2017). There can be influences of various elements like philosophy,