Tax Reform Central To Mauritius's Economic Transformation

by Lorys Charalambous, Tax-News.com, Cyprus

17 August 2006

Mauritius is keeping pace with world-wide trends in tax policy, and the government has reviewed the tax system to reward effort, innovation and entrepreneurship, according to Deputy Prime Minister and Minister of Finance and Economic Development, Rama Sithanen.

Addressing the the 27th Annual Technical Conference of the Commonwealth Association of Tax Administrators (CATA), Sithanen said that reform of tax policy is an integral part of an overall reform programme focusing on fiscal consolidation and restoring fiscal discipline, improving the investment climate, mobilizing Foreign Direct Investment and restructuring the economy.

Sithanen told the conference that Mauritius has been forced to change course in the face of three external shocks, namely, the dismantling of the Multi-Fibre Agreement, the 36% cut in the price of sugar and the soaring price of petroleum products, with global economic uncertainties adding extra urgency to these reforms.

He stated that the government had opted for fundamental reforms in order to build a more resilient, high growth economy and to stimulate employment creation and promote greater social justice. According to the Minister, tax administration will have a prominent role to play, to ensure that the tax reforms have maximum positive impact. The purpose of the tax reforms can only be realized if tax administration is effective and efficient, he said.

“A simple and low tax jurisdiction is critical to our endeavour to open our economy and country to the rest of the world. We are liberalizing trade at the same time as we are empowering our enterprises to be globally competitive. But most importantly, we are opening our country to attract foreign talent, ideas, capital and technology.” the Deputy Prime Minister told the delegates.

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