Tax Avoidance: More Than a Billion Rupees to Recover

Currently, two operations 'crack down' are underway which target those who have used an illegal use of 'Returning Resident Scheme' for the import of luxury cars and traders who do not comply with the obligations of the VAT Act. Tax evasion on the cars is estimated at Rs 20 million, while the shortfall on the VAT amounts to more than Rs 100 million.

Last week, gambling traders  found themselves in trouble. The MRA has served a claim for tax of Rs 420 million to 75 operators who operate slot machines without the appropriate license. The exercise of voluntary disclosure, which focuses on the regulation of tax evaders’ records should allow the tax administration to raise Rs 500 M. The whole is more than a billion rupees. Tax revenues this year are estimated at Rs 64 billion.

Lawyers, doctors, dentists and merchants, all targeted

The Mauritius Revenue Authority (MRA) is intensifying the fight against tax evasion. Businessmen, owners of gambling houses, lawyers, doctors, dentists, traders or hawkers are targeted by different operations crack down against tax evaders. Thus, since the end of 2012, the MRA conducted the seizure of 11 luxury cars, BMW, Mercedes, Porsche and Jaguar, all imported under 'Returning Resident Scheme'.

The investigation by the competent authorities concluded that these cars were not used by their genuine owners, but by businessmen who have benefited from the concession perceive 'Returning Citizens' on imported cars. Other cases relating thereto are being considered.

Another major operation of the MRA for traders. Since mid-October, the Mobile Monitoring Team conducts an audit of traders, 15,000 in total, which are registered for VAT. This operation aims to track down those who do not comply with the legal provisions of the VAT Act. In the MRA, it is argued that the VAT is a major source of revenue for the state, representing more than 40% of the taxes collected. The IRS says he compiled a list of those suspected of circumventing the law. This, through the formula of Risk-Based Approach (RBA). According to the benefits of this exercise, there are several large businesses involved.

75 operators of gambling houses have gone by the wayside last week. They do not hold the appropriate license for the operationalization of 'limited payout machine'. They end up with a claim of Rs 420 M. 'Incentive Schemes 2013', which guarantee criminal impunity, have encouraged some tax evaders to regularize their situation. The amount that should reap the MRA is estimated at Rs 500 M.

Worldwide, tax evasion reach 26,000 billion euros, which represents an estimated up to a third of the financial resources of the planet, or the GDP of the United States coupled with that of Japan.