MRA – STATE LAND – BENEFICIARIES – FRAUD & TAX EVASION
(No. B/1051) Mr E. Guimbeau (First Member for Curepipe & Midlands) asked
the Vice-Prime Minister, Minister of Finance and Economic Empowerment whether he will,
for the benefit of the House, obtain from the Mauritius Revenue Authority, information as to
if beneficiaries of State land have been involved in cases of fraud or other forms of tax
evasion, since July 2005 to date.
The Vice-Prime Minister, Minister of Finance and Economic Empowerment (Dr.
R. Sithanen): Mr Deputy Speaker, Sir, I am informed by the Mauritius Revenue Authority
(MRA) that since July 2005 to date, investigations have been carried out into 26 cases of
under declaration of income by land developers by the investigation unit of the former
Income Tax Department and the Fiscal Investigation Department of the MRA. In this respect,
claims for a total amount of Rs56 m. , including penalties have been issued. I understand that
out of these cases, six of them are still under appeal.
I am further informed that specific information precisely on beneficiaries of State
land, who have been involved in cases of fraud or other forms of tax evasion, as requested
for, is not compiled in the MRA data base. However, MRA in its efforts to make all
taxpayers pay their fair share of tax liability, tracks all under collections of income tax
irrespective of whether such declarations are in respect of development on freehold or State
land.
I am also informed that MRA monitors closely all major real estate development
projects to ensure that the promoters fulfil their obligations under the tax laws administered
by the Authority.
Mr Deputy Speaker, Sir, as regards the complex schemes that have been devised by
certain promoters to sell bungalows and apartments to non-citizens through mechanisms that
might not be in accordance with the Non-Citizens (Property Restriction) Act, I wish to
reassure the hon. Member that the MRA is examining closely those projects to determine
whether there has been any case of tax evasion. On the regulatory side, as the House is
aware, we have brought a number of amendments to the legislation in the Finance
(Miscellaneous Provisions) Act 2009 to prevent the use of such schemes in the future.
Moreover, a committee has been set up to take stock of projects where there are
presumptions that disguised ‘sale’ of immovable property to non-citizens have been effected
with a view to determining the most appropriate course of action against such practices.
Mr Guimbeau: Will the Minister table the names of those involved in those cases of
fraud and tax evasion?
Dr. Sithanen: I can’t.
Mr Guimbeau: Why not, Sir?
Dr. Sithanen: You have to protect the privacy of individuals. You’ll be surprised if
these names are made known.
Mr Guimbeau: Mr Deputy Speaker, Sir, I won’t be surprised. That is the reason for
which I am asking for the names.
Dr. Sithanen: You know that the law does not allow me to do this.
Mr Guimbeau: Can the hon. Minister request the MRA to initiate an audit trail on
the bank accounts of all those who have benefited from State land and Pas Géometriques and
then transferred it to a promoter? I want to know whether the Minister can request the MRA
to have an audit trail on those accounts.
Dr. Sithanen: I wish this could be done. But, as you know, this is a country where
there is the rule of law. We know under what circumstances we can have access to the bank
accounts of individuals; and these are extreme circumstances. So, there must be a prima facie
case of what has happened first, and this can be done. That is why we have set up a
committee in order to investigate some of these colourable devices that have been used to
circumvent the Non-citizens (Property Restriction) Act. It is a difficult subject, and that is
why we have set up a committee. The MRA is doing its work.
Mr Guimbeau: It is the duty of the MRA to enquire into such cases as well. Is it the
case?
Dr. Sithanen: The MRA cannot, on its own, go to the bank and look into the bank
accounts. This is forbidden by the law of this country.
Mr Jhugroo: Can the hon. Vice-Prime Minister explain to me why names cannot be
revealed when there is fraud or other forms of tax evasion? It should be published. People
should know those who are doing tax evasion or fraud.
Dr. Sithanen: We will have to change the law, my hon. friend. What we are saying is
that, for the moment, a person, even if I disagree with him, is deemed to be innocent until
proof, evidence is given against him. This is a country where there is the rule of law, and this
is the way that it is being done. I would have liked if it could have been otherwise. We know
many cases where basically that has happened, but there is a process which must be
respected.
Mr Dowarkasing: Can I ask the Vice-Prime Minister whether he has checked if we
can use the provisions of the Data Protection Bill to get those information?
Dr. Sithanen: I don’t know what information the hon. Member is talking about.
(Interruptions)
Then, we have to go to the court for this. First, we have to make a case. It cannot be a
fishing expedition. Even though I am not very happy about certain things, there is a process
which we have to respect. First, we have to satisfy the Judge that there is sufficient case for
the information to be released.
The Deputy Speaker: Next question! Hon. Bhagwan!
(Interruptions)
The Deputy Speaker: Can I have some order, please! For some reason, the hon.
Vice-Prime Minister, Minister of Tourism, Leisure and External Communications is not in
attendance. What I suggest is that we go to the next question, and then we will come back to

this question as soon as he arrives. There must be some good reason for his absence.

MRA – STATE LAND – BENEFICIARIES – FRAUD & TAX EVASION

Sitting tuesday 27 October 2009

(No. B/1051)

Mr E. Guimbeau (First Member for Curepipe & Midlands) asked the Vice-Prime Minister, Minister of Finance and Economic Empowerment whether he will, for the benefit of the House, obtain from the Mauritius Revenue Authority, information as to if beneficiaries of State land have been involved in cases of fraud or other forms of tax evasion, since July 2005 to date.

The Vice-Prime Minister, Minister of Finance and Economic Empowerment (Dr. R. Sithanen): Mr Deputy Speaker, Sir, I am informed by the Mauritius Revenue Authority (MRA) that since July 2005 to date, investigations have been carried out into 26 cases of under declaration of income by land developers by the investigation unit of the former Income Tax Department and the Fiscal Investigation Department of the MRA. In this respect, claims for a total amount of Rs56 m. , including penalties have been issued. I understand that out of these cases, six of them are still under appeal.

I am further informed that specific information precisely on beneficiaries of State land, who have been involved in cases of fraud or other forms of tax evasion, as requested for, is not compiled in the MRA data base. However, MRA in its efforts to make all taxpayers pay their fair share of tax liability, tracks all under collections of income tax irrespective of whether such declarations are in respect of development on freehold or State land.

I am also informed that MRA monitors closely all major real estate development projects to ensure that the promoters fulfil their obligations under the tax laws administered by the Authority.

Mr Deputy Speaker, Sir, as regards the complex schemes that have been devised by certain promoters to sell bungalows and apartments to non-citizens through mechanisms that might not be in accordance with the Non-Citizens (Property Restriction) Act, I wish to reassure the hon. Member that the MRA is examining closely those projects to determine whether there has been any case of tax evasion. On the regulatory side, as the House is aware, we have brought a number of amendments to the legislation in the Finance (Miscellaneous Provisions) Act 2009 to prevent the use of such schemes in the future.

Moreover, a committee has been set up to take stock of projects where there are presumptions that disguised ‘sale’ of immovable property to non-citizens have been effected with a view to determining the most appropriate course of action against such practices.

Mr Guimbeau: Will the Minister table the names of those involved in those cases of fraud and tax evasion?

Dr. Sithanen: I can’t.

Mr Guimbeau: Why not, Sir?

Dr. Sithanen: You have to protect the privacy of individuals. You’ll be surprised if these names are made known.

Mr Guimbeau: Mr Deputy Speaker, Sir, I won’t be surprised. That is the reason for which I am asking for the names.

Dr. Sithanen: You know that the law does not allow me to do this.

Mr Guimbeau: Can the hon. Minister request the MRA to initiate an audit trail on the bank accounts of all those who have benefited from State land and Pas Géometriques and then transferred it to a promoter? I want to know whether the Minister can request the MRAto have an audit trail on those accounts.

Dr. Sithanen: I wish this could be done. But, as you know, this is a country where there is the rule of law. We know under what circumstances we can have access to the bank accounts of individuals; and these are extreme circumstances. So, there must be a prima facie case of what has happened first, and this can be done. That is why we have set up a committee in order to investigate some of these colourable devices that have been used to circumvent the Non-citizens (Property Restriction) Act. It is a difficult subject, and that is why we have set up a committee. The MRA is doing its work.

Mr Guimbeau: It is the duty of the MRA to enquire into such cases as well. Is it the case?

Dr. Sithanen: The MRA cannot, on its own, go to the bank and look into the bank accounts. This is forbidden by the law of this country.

Mr Jhugroo: Can the hon. Vice-Prime Minister explain to me why names cannot be revealed when there is fraud or other forms of tax evasion? It should be published. People should know those who are doing tax evasion or fraud.

Dr. Sithanen: We will have to change the law, my hon. friend. What we are saying is that, for the moment, a person, even if I disagree with him, is deemed to be innocent until proof, evidence is given against him. This is a country where there is the rule of law, and this is the way that it is being done. I would have liked if it could have been otherwise. We know many cases where basically that has happened, but there is a process which must be respected.

Mr Dowarkasing: Can I ask the Vice-Prime Minister whether he has checked if we can use the provisions of the Data Protection Bill to get those information?

Dr. Sithanen: I don’t know what information the hon. Member is talking about.

(Interruptions)

Then, we have to go to the court for this. First, we have to make a case. It cannot be a fishing expedition. Even though I am not very happy about certain things, there is a process which we have to respect. First, we have to satisfy the Judge that there is sufficient case for the information to be released.

The Deputy Speaker: Next question! Hon. Bhagwan!

(Interruptions)

The Deputy Speaker: Can I have some order, please! For some reason, the hon. Vice-Prime Minister, Minister of Tourism, Leisure and External Communications is not in attendance. What I suggest is that we go to the next question, and then we will come back to this question as soon as he arrives. There must be some good reason for his absence.