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Friday, December 13, 2019

Tax Heaven: How Mauritius help western multinationals evade taxes in Africa

A new investigative report has shed light on how some of the poorest countries in Africa are losing out on millions of dollars in tax revenues from Western multinationals and wealthy individuals.

The report, from the International Consortium of Investigative Journalists, details how companies and individuals use Mauritius, to legally avoid paying higher taxes in the countries where they actually work and make their money.

Mauritius however, denies any wrongdoing and insisting that it is compliant with all relevant international laws.

The report is based on 200,000 confidential documents that show for the first time how one offshore law firm helped its international clients avoid millions of dollars in taxes.

The cache of confidential records, emails and filings, called the Mauritius Leaks, reveals the legal practices that divert tax revenues from poor African, Middle Eastern and Asian countries back to the pockets of Western corporations, with Mauritius taking its cut.

The documents have come from the Mauritius office of a Bermuda-based law firm Conyers, Dill & Pearman, and cover a period from the early 1990s until 2017.

The documents contain detailed accounts that implicate major multinationals and accounting firms in complex financial transactions designed to avoid paying taxes.

The investigation says the companies took advantage of 46 tax treaties Mauritius has with mostly poor countries, the absence of a capital gains tax and weak regulations, to register shell companies in the island nation even though they had no staff or operations there.

The law firm Conyers sold its Mauritius office to three former employees in 2017 and says it is regulated by the laws in the countries it operates in.

Mauritius has since tightened its laws for offshore companies but some tax experts still see it as a facade that allows tax evasion and avoidance.

SourceICIJ

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