Mauritius ready to share past banking information provided India asks for it

Written by Bijay Shankar Patel | New Delhi | Updated: Mar 13 2012, 07:16am hrs
In what may strengthen the government's resolve to track illicit money stashed in tax havens, Mauritius has agreed to share past banking information with India if New Delhi makes a request in this regard. The development assumes significance as India has maintained that countries are not willing to share banking information with retrospective effect and there is a need for changes in the international standards.

Getting past information would help target the real tax-evaders who have a track record on moving black money.

Under the terms of tax treaties that India has with various countries, there is no exclusive provision for sharing past banking information. Mauritius has walked the extra mile to provide this privileged piece of information to India purely on a voluntary basis.

Responding to FE queries, Mauritian finance and economic development ministry said: "...Mauritius has no objection to exchanging information with our partners, including banking information, in line with international best practices and there are no legal, administrative or other impediments in the way."

It added: In fact, Mauritius has, on several occasions, shared banking information with India. Most of these cases related to the past.

India had pitched for a consensus among the G-20 nations last year on sharing of tax and banking information with retrospective effect as it would help in investigation of earlier cases.

Concerns have been raised in the recent past over round-tripping or routing of illicit money from India back into the country through Mauritius. Last month, CBI director AP Singh had said that Indians have stashed away an estimated $500 billion in black money in foreign banks, out of which the maximum outflow of illegal funds was to tax havens, such as Mauritius, Switzerland, British Virgin Islands and Lichtenstein.

However, Mauritius has refuted the charge of being a tax haven. Should the CBI director be aware of any specific case or cases (of stashing illegal fund in Mauritius), he should report it to us and we can assure him that this will be diligently investigated. We have, however, received no request to date in this respect, it said.

The two countries have set up a joint working group to revise the existing double taxation avoidance agreements (DTAAs). "Mauritius has listened to the concerns expressed by India and

has also made some concrete proposals. It is also important that our Indian counterparts address issues of interest to Mauritius," the island nation said.

India wants any company based in Mauritius and operating in India to pay tax on the capital gains they make here. It suspects that the Mauritius route is misused by investors from third countries and also by many Indians firms to reinvest in India. Recently, Mauritian PM Navinchandra Ramgoolam was in India and has said that Mauritius does not want to have round-tripping or money laundering.

The black money lying abroad has become a big issue for the government as it is under pressure from the Opposition parties, SC and the civil society on the issue.

India has completed tax negotiation agreements with 58 countries, which include DTAAs and Tax Information Exchange Agreements. Of these 58 treaties, India has amended DTAAs with 22 countries and signed new DTAAs with 19 nations. It has also signed 17 TIEAs.