Financial Services - Vineet Jugessur : “It has been a highly volatile year”

Finance expert Vineet Jugessur explains that the financial sector comprises the global business, insurance, banking, securities and asset management. He recalls that over the past few years, this sector has become a very important pillar of the economy, and in 2017, it is expected to contribute around 12.3% to the country’s GDP.

“This year has been highly volatile for this sector in Mauritius, whereby a mixed feeling of enthusiasm and disappointment has been experienced by stakeholders. The most highlighted event, here, has been the amendments in Double Taxation Avoidance Agreements (DTAA) with India.”

Moreover, he states that there has been a decrease in Key Repo Rate to 3.50%, whilst the expectation was to keep it unchanged at 4% and many considered this a disguised way of depreciating the rupee!

“The EU has named 17 countries in its first ever tax haven blacklist. The blacklist is meant to force countries offering unfair tax advantages to bring their policies in line with EU standards. It also puts a further 47 countries, including Mauritius, on a ‘Grey list’. These countries have between one to two years to take corrective actions to stay off the blacklist. Twenty-four jurisdictions including Mauritius have agreed to amend or abolish unfair or opaque tax regimes by 2018.”

He further adds, “as announced in the 2017/2018 Budget speech, a ‘blueprint’ elaborated by the Ministry of Financial Services, Good Governance and Institutional Reforms together with the Economic Development Board, the Bank of Mauritius, the Financial Service Commission and all key stakeholders in the financial services sector is expected by end of the year. The vision for this much awaited blueprint is for the sector to further adopt and meet international requirements on taxation over the next 10 years. The objective is to increase the sectors contribution to GDP to 15% by 2020.”

The finance expert also recalls that Mauritius has been ranked 25th out of 190 countries by the World Bank's Doing Business Report 2018 and confirms its leading position in the African continent. “With respect to its last year's ranking (49th), Mauritius improved its rank by 24 spots confirming that the country has improved its business regulations. Focus and resources need to be invested by the government to continuously improve its business regulations in the future.”

He believes that to the international business community, and both individual and institutional investors, Mauritius has always positioned itself as a clean jurisdiction, and presents itself as a reliable and dependable gateway or platform in Africa.

“The Government and its agents should strive to keep this reputation untainted. With increasing pressure coming from the international press, the ‘Paradise Papers’ and the recently published EU Blacklist, Mauritian authorities are called upon not only to be more alert, but also to work in collaboration amongst themselves. Achievement of optimal results to improve the sectors performance will only happen if effective strategies are implemented, which should be in line with the country’s strategic objectives for the Financial Sector: Vision 2030.”