Pouring insults and using intimidatory tactics will not help to break the logjam with respect to what has happened to the treaty between Mauritius and India on double taxation. What is instead required is an informed discussion, an enlightened debate, an objective analysis and a dispassionate assessement of what has exactly been conceded at the negotiating table by Mauritius and its implications and ramifications on the global business industry.

The subject matter is too serious to be treated with such light-heartedness with reference to confi dentiality of documents and to the necessity to wait for ratifi cation before disclosure. This is tantamount to logic turned upon its head. If anything, this is the time to let the industry and the nation know what has been given away  and to try to make amends if deemed necessary. Once the protocol is ratifi ed and signed by the two Ministers of Finance, it will be game, set and match over against us. Nothing will be possible.

Even with the best of intention in the world, human beings are prone to making mistakes. The disaster lies in a systematic and obstinate refusal to admit the mistake and to try to lead people offtrack. It is far better to feel sorry now than to regret it for the whole life.

I hope as alleged by the Minister for Financial services that I have read the wrong report. I pray that such be the case and that no change has been made to Article 13 on capital gains tax. Equally, I sincerely wish that I have wrongly interpreted, as again suggested by the Minister, the content of the signed protocol that brings significant changes to the treaty. However my detailed research and my discussion with many stakeholders suggest otherwise. That changes have indeed been brought to the backbone Article 13 of the treaty. This is a game changer with far- reaching consequences.

Government has a duty to inform the nation of what has happened. For transparency, governance and in view of the strategic importance of global business as a key pillar in our economic architecture. There are too many questions with potentially devastating economic and financial consequences for our country that remain unanswered.

I have followed this dossier for almost 25 years. 10 years as Minister of Finance who negotiated with Dr Manmohan Singh when he was Minister of Finance in the early 90’s and with Mr Mukherjee and Mr Chidambaram when they held the Finance portfolio between 2005 and 2010.  10 years as a professional economist and almost 5 years as an operator in the global business sector. A rare combination of policy making/negotiator, economic analysis and operational experience.

Based on that domain knowledge there are at least 10 questions that need answers. Whether in terms of making the document known to the public or having clear answers from the concerned authorities who should know as they are responsible for the negotiation.

i) Is it true that that Article 13 on capital gains has been radically altered against our country ? That effective 1st April 2017, India will charge capital gains tax instead of Mauritius. This is the crux of the debate.

ii) Is it the case that a specific clause 13. 3A has been added in Article 13 on capital gains tax which states that disposal of shares in a company resident in India shall be taxed in that contracting state ( i.e India) ?

iii) Is it true that the limitation of benefits clause will not apply to the newly introduced  clause 13. 3 A ? That even with an annual expenditure threshold of Rs 1.5 M in Mauritius, such companies will still be taxed on capital gains in India ?

iv) What is the scope of the new clause 13.4 in Article 13 ? What is the perimeter of these taxing rights ? If immovable property, movable property of a business unit and disposal of shares are taxed on capital gains by India, what is left for our country in terms of taxing rights under Article 13.4 ?

v) Will the LOB of Rs 1.5 M apply to clause 13.4 only ? Under what circumstances will these apply ? Especially as the protocol states that transactions that are not bona fi de will not be covered by the new agreement

vi) Is it the case that withholding tax on bank interest has increased from 0 % to 7.5 % ?

vii) Is it true that we have not received a MFN ( most favoured nation clause) ? A MFN would have protected us against discrimination as India has similar, if no identical, treaties with at least 15 other countries. If Mauritius loses its taxing rights and it takes years if not decades for India to review its treaties with other partners, then we would be at a huge disadvantage during that period.

viii) Does the grandfathering provision cover all Articles in the treaty or is it restricted to Article 13.4 only ? It makes a huge difference in terms of safeharbouring  existing investment and structures ? It will also determine the speed of exit of private equity funds.

ix) Which specific clause in the revised treaty will lead to a huge boost in investment opportunities into India using our platform when ALL revised clauses are against our interest except the withholding tax on interest on corporate debt that has come down to 7.5 % ? Even the clauses on fees for technical services and other income are against us !

x) Which particular provisions in the protocol will produce an increase in investment by Indian companies into Africa using our international financial services platform ? Especially when Indian companies can invest directly into Africa without using Mauritius, and after the revised treaty between South Africa and Mauritius that is also against our interest and when India can impose CFC legislation to prevent such structuring ?

In my humble opinion, this is not about showing that one is better than Xavier-Luc Duval, Pravind Jugnauth and Rama Sithanen put together. That it took only one meeting over two days in Delhi to resolve all outstanding issues that three former Ministers of Finance with an armada of local and foreign experts have been unable to address since 2007 over 10 meetings and several exchanges !

In some cases failure is better that success in negotiation !

It is about the economic development of our country, its growth, its diversification and its dynamism. It is about job creation, especially for our young graduates in the best paid industry in Mauritius. It about the indirect, induced and multiplier effects of this important industry. It is about the upstream and downstream catalytic consequences of global business. Even taxi drivers who shuttle foreign directors between airport and hotels and between meetings will lose out ! And ship model manufacturers who make good money with their sales to these visitors.  It is about crucial support for our balance of payment in terms of vital foreign exchange earnings. It is about a very important chunk of our corporate tax proceeds (30 % of corporate tax intake with 5 % of GDP).  

This is the bottom line. The rest is superfluous. And we have a legitimate right to know. Let us pray that there is still time to make amends !