Full Faith in India on Tax Treaty Revision: Mauritius

NEW DELHI: Dismissing apprehensions of Mauritius being used to route black money as "misconception", its Prime Minister Anerood Jugnauth has termed the issue as an aberration in the "very special" ties with India and hoped that revision of their tax treaty won't harm its interests.

Stating that Prime Minister Narendra Modi has assured him India will not do anything that would harm Mauritius, Jugnauth said the two countries are "sensitive to each other's needs" and the negotiations on the Double Taxation Avoidance Treaty were taking place in this context.

When asked whether there was any timeframe for resolving this long-pending revision of the tax pact, Jugnauth said he has not insisted on any particular time limit.

"I leave it (to India). There is full freedom to your country, your Prime Minister... to look into it. I have confidence in the Prime Minister (Modi) and I trust him. I will wait for it and then we can comment," he said.

The proposed tax treaty amendments, hanging in balance for many years, are aimed at addressing India's concerns over the island nation being allegedly used to route illicit funds into the country.

"It is wrong and a misconception (that Mauritius is being used for round tripping). You know we are close to India," Jugnauth told PTI in an interview here.

Emphasising that Mauritius has a "very special" relationship with India, he reiterated that he is ready to go the extra mile to erase the misconception and assured that everything would be normal soon.

On whether the tax treaty issues are just an aberration in the otherwise strong bilateral ties with India, he replied in the affirmative.

"Apart from the DTAA (Double Taxation Avoidance Agreement) dispute, there is nothing else. In the international field as I said we always stand by India and whatever stand India takes we support India," said Jugnauth who was here recently to attend India-Africa Forum Summit.

During his visit, Jugnauth also met Modi.

"Modi had assured us even when he was in Mauritius. He said India will never do anything that will harm Mauritius," he said. Modi had visited Mauritius in March.

To a query about flow of genuine money being impacted by uncertainties over the tax treaty, he said, "What has happened lately has raised doubts in the minds of people. What will happen soon may get rid of all these doubts and everything will go back to normal."

India has concerns that Mauritius, which is one of the top sources of FDI into the country, is being used for round- tripping of funds. Round-tripping is usually referred to routing of domestic inverstments through Mauritius to take advantage of the DTAA between the two countries.

"Let me start with the fundamentals. India has time and again reaffirmed that it will do nothing to hurt the economic interest of Mauritius.

"In addition, India and Mauritius share a unique relation and are sensitive to each other's needs. It is in this context that the negotiations on the Double Tax Avoidance Treaty are taking place," Jugnauth said.

He further said that the two countries have made important progress and "we must ensure that the treaty remains workable".

"First, we must see that the final product addresses India's concerns about any potential abuse of the Treaty and second, we must see to it that the treaty remains commercially meaningful for Mauritius," he added.

When told that the tax issues have been going on for many years, Jugnauth said, "I won't say many many years. Many many years means a century. I will say this is going on for about 12 years, the discussions and all that. It is very difficult for me right now to make more comments".

A significant number of global firms, including those from the US and Europe, have traditionally been using the island nation to route their investments in India to benefit from an Indo-Mauritius DTAA in force since 1983.

"When it comes to money and profit people are very money minded and people are always greedy and whatever they get is not enough. That is natural among people all over the world but we should not go by that.

"We should look at the general feelings that exists between Mauritius and India. I am confident that this general feeling will prevail over the greed of some people," Jugnauth said.

Asserting that Mauritius was a clean and trusted jurisdiction, Jugnauth said he would "walk the extra mile" to ensure that its reputation as clean and trusted jurisdiction is upheld at all costs.

"We will put in all the necessary efforts and walk the extra mile to ensure that our reputation as clean, proven and trusted jurisdiction is upheld at all costs," he said.
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