Mauritius Leaks: Are multinational companies using Mauritius to avoid taxes?

Last week, the International Consortium of Investigative Journalists (ICIJ) sparked controversy with the release of the 'Mauritius Leaks', uncovering how multinational companies utilized Mauritius as a tax avoidance strategy across continents. The findings were met with firm denial by the Mauritian government, labeling the accusations as baseless attempts to tarnish the country's reputation. In response to the allegations, Ken Poonoosamy, Deputy CEO of Economic Development Board Mauritius, vehemently defended his country's position in a recent CNBC Africa interview. Poonoosamy reiterated that Mauritius boasts a diversified economy with financial services contributing a substantial 11.7% to its GDP, debunking claims of solely being a tax haven. He emphasized that Mauritius stands as a crucial player in driving investment, job creation, and overall prosperity within Africa. Dismissing the negative portrayal stemming from the leaks, Poonoosamy asserted that Mauritius has adhered to international norms and diligently fulfilled its global obligations. The Deputy CEO highlighted Mauritius' proactive tax administration policies, underscoring the country's early adoption of international conventions such as the Common Reporting Standards and the multinational convention to prevent base erosion and profit shifting. With a transparent 15% corporate tax rate and a myriad of reforms aimed at fostering a business-friendly environment, Mauritius has positioned itself as a leading hub for investment and trade in Africa. Addressing the incentives that attract businesses to Mauritius, Poonoosamy lauded the transparent taxation system and the various reforms that have streamlined processes for investors. He emphasized the country's commitment to compliance with international standards, ensuring a secure and trustworthy environment for operations. Additionally, he highlighted Mauritius' ranking as one of the top countries in Africa for business, attributing this feat to the nation's robust legal framework and investor protections. When questioned about potential actions against the ICIJ, Poonoosamy affirmed Mauritius' right to defend itself and counter the negative narrative being propagated. He emphasized that many companies choose Mauritius not for tax arbitrage but due to the predictability, stability, and legal framework it offers. Poonoosamy underscored the country's dedication to good governance and combatting illicit financial activities, asserting its legitimate right to present its side of the story. In conclusion, despite the challenges posed by the Mauritius Leaks, Poonoosamy reiterated Mauritius' commitment to upholding international standards, fostering investment in Africa, and maintaining a transparent and conducive business environment. As the controversy unfolds, all eyes remain on Mauritius and its efforts to safeguard its reputation amidst the tax avoidance allegations.