Mauritius

According to The Economist,

What identifies an area as a tax haven (paradis fiscal) is the existence of a composite tax structure established deliberately to take advantage of, and exploit, a worldwide demand for opportunities to engage in tax avoidance.

In Mauritius, law allows for the creation of companies with a Category 2 Global Business Licence. Those companies share the following characteristics (as confirmed in this official document from the Financial Services Commission):

• Not resident for tax purposes (i.e. those companies do not pay any tax on their profits to the Mauritius Government)
• Audited financial statements need not be filed (Why? I do not understand why the nascent Knowledge Seven Ltd will have to file one at the end of the financial year whereas a companies with potentially billions of dollars of profit won’t.)
• Records are not available to the public (Why? Are they dealing in anything, ahem, controversial?)
• Business with residents is not possible
• etc.

 

Google currently returns 44,900 pages when searching for the phrase “Category 2 Global Business Licence Mauritius” which shows that a lot of people are really keen about Category 2 Global Business Licences in Mauritius…

Two days ago, Eco89, which is a spinoff of Rue89, which describes itself as a “Site d’information et de débat sur l’actualité, indépendant et participatif”, published an articled entitled Maurice, Singapour, Delaware : ma planète off-shore en 3 clics. The article explicitly says that Mauritius is a tax haven because the Category 2 Global Business Licence allows companies from developed countries to evade tax in their own country by setting up their headquarters in Mauritius. The article even mentions that “le nom du propriétaire n’est pas révélé aux autorités” which is something I find very dangerous. Who knows what kind of people own companies in our country?

Yesterday, the French President, Nicolas Sarkozy said during an interview in Le Figaro:

Il existe un paradis fiscal dont le PIB est de 2 milliards de dollars et dont les institutions financières hébergées en son sein ont garanti 1.800 milliards de dollars.

Il serait inacceptable que des décisions concrètes ne soient pas mises en Å“uvre concernant les paradis fiscaux dans les jours qui viennent. Nous voulons un capitalisme d’entrepreneurs et pas un capitalisme de spéculateurs. 62% des hedge funds sont logés dans les paradis fiscaux.

Reading these articles as well as the official documents from the Government of Mauritius, I can’t prevent myself feeling very concerned. Is Sarkozy talking of Mauritius? Has Mauritius really become a tax haven? And, more importantly, à qui profite le crime if this is true?

Since creating Ideas to make Mauritius better one month ago, 43 different people have submitted 145 ideas and cast 1,570 votes which is great.

For example, here are a few ideas which have proved to be very popular:

• All young people must be taught about the economy, how to spend wisely and why it is important to save money (yes, everyone gets old after some time…) This might be done at secondary level for that matter.
• Mauritius Telecom should offer powerful hosting facilities (e.g. Linux, Apache, MySQL and PHP) for free. If this is done, a lot of Mauritians will choose to host their websites locally hence decreasing international traffic. Everyone benefits.
• People should stop thinking in terms of communities, casts and their “own”. We are all just Mauritians.

 

Some ideas have proved to be very controversial:

• People ,who can afford, should be made to pay in the public health sector (Hospitals, Community and Local area health centres) so that quality of care dispensed can be improved and load on government budget decreased.
• There are too many casinos in our towns and villages. Something must be done before people lose too much money and start doing bad things. Incidentally, casinos seem to attract prostitutes and drug dealers too…
• Death penalty should be introduced for some extreme cases. “Extreme cases” should be decided very carefully though. Our current laws are IMHO, too kind towards rapists, molesters, murderers….

The experiment is still on. You can easily participate by visiting

https://www.noulakaz.net/ideas/