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Pravind Jugnauth
is a new entry this year
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Pravind Jugnauth has had a diverse political career and,
since returning to the role of finance minister of Mauritius on
May 26 2016, he has made strides in rebuilding its tax system
through the renegotiation of tax agreements that has earned him
a place on the Global Tax 50.
Between hosting the OECD's fifth Global Forum for Competent
Authorities on July 7-8 and amending the infamous double
taxation agreement (DTA) with India, Mauritius has made notable
tax developments under Jugnauth's direction.
During his time as deputy Prime Minister from September 2003
to July 2005, and as finance minister, Jugnauth had reduced
taxes on thousands of commodities. He also launched a programme
to make Mauritius a duty-free island and is now tasked with
rethinking the island's tax-centred approach to attracting
capital inflows.
The signing of the protocol to amend the 1982 DTA between
India and Mauritius was a landmark moment that put an end to
treaty abuse and the round tripping of funds. The protocol
signalled an end to the island's tax haven status and how
investors take advantage of the tax benefits. Since the amended
DTA with India, Jugnauth has been tasked with ridding the
jurisdiction of its tax haven status to create a fair and
competitive business market, which he is achieving. The DTA
between Mauritius and India will enter into force on April 1
2017, but the treaty remains a concern for the Mauritian tax
authority, as it poses a possible decrease in foreign
investment. However, FDI forecasts indicate that Mauritius
should not be negatively impacted.
Other notable advancements to increase cooperation in tax
matters between Mauritius and other jurisdictions over the past
year include the tax information exchange agreement signed with
South Korea on August 11. The agreement will further develop
trade and investment between the two countries.
Businesses see Mauritius as a hub for global trade and
investment. The economy has evolved into an "international
financial centre for excellence and repute," Jugnauth told the
Financial Times. With the finance industry accounting
for more than an eighth of the economy, it is vital that
Jugnauth works at improving Mauritius to a successful global
financial centre. The most attractive element of its financial
industry to investors has, until now, been the offshore sector,
which is built on a low-tax regime and an extensive treaty
network.
Earlier this year, Jugnauth visited Brussels to meet with
key EU decision makers to discuss EU tax initiatives, including
transparency and exchange of information. The EU is one of the
island's most reliable development partners.
Jugnauth built on his earlier efforts in 2016 when
announcing the budget measures. Although this year's budget did
not have many fiscal changes, Jugnauth proposed initiatives to
improve the country's infrastructure, support local
entrepreneurs through tax incentives and access to finance, and
offer VAT exemptions on a number of products. However, EY's
technical analysis of the budget criticised the perceived lack
of consideration for a business restructuring exercise. Looking
ahead, further work on improving this will likely continue
behind the curtains but businesses should not get too
comfortable with expected change inevitable.
Overall, during a speech at the opening of the OECD
conference in July, Jagnauth said the government will continue
to ensure that Mauritius maintains its good reputation as a
"sound and well-regulated jurisdiction, while maintaining full
engagement with our international partners and fulfilling our
international obligations".