In a circular issued this summer, the Indonesian Directorate General of Taxation revealed that it had terminated the DTA with Mauritius over concerns that under the terms of the agreement, non-Mauritian investors could, via offshore companies known as Special Purpose Vehicles (SPVs), invest in Indonesian companies and take advantage of the tax benefits afforded by the treaty as if they were resident in Mauritius.

However, Mr Jugnauth told those attending the launch of the Mauritian branch of the International Fiscal Association (IFA), that he had written to his Indonesian counterpart asking for negotiations on the renewal of the double tax pact to be opened.

After India, Indonesia represents the Mauritian financial services sector's second largest market, with investments to the tune of $3 billion likely to be adversely affected if bilateral DTA negotiations are unsuccessful.