Indefinite Tax Holiday To Boost Freeport Activities

This was announced by the minister of Finance and Economic Development, Xavier-Luc Duval in his budget speech on Friday.

The Board of Investment (BoI) thinks this budgetary measure will definitely give a strong boost to the freeport sector and will help enhance cross border trade and transactions.

According to the BoI, a zero per cent corporate tax as from July 1, 2013 will provide more certainty to freeport operators. It will also help increase the visibility of the island as a regional trade, marketing and distribution platform.

The secretary of the Freeport Operators Association, Afzal Delbar told The Independent that the association has asked the government to consider the freeport as any other sector of the economy.

He added, “The tax holiday for freeport operators was an anomaly, which the government had to redress. We have always asked the government to do so. It was difficult to market the sector and offer undefined and short term solutions to investors.”

He also explained that there is a need to compare the freeport sector in Mauritius to other freeports in countries such as Dubai and Hong Kong. Now Djibouti, South Africa and Madagascar are also developing freeport activities.

Delbar further explained, “If we impose taxes on freeport foreign investors, it will act as a disincentive and they will ask what is ‘free’ in the sector.”

He also said that the freeport sector was created with specific incentives, that is, to offer facilities to investors.

“Several investments were made in the economic sector but due to the tax holiday, which was granted only till 2013, it was difficult to attract foreign investors,” the secretary of freeport operators association said.