Will Global Business companies be exempt from the Corporate Climate Responsibility (CCR) Levy, as is the case for CSR (corporate social responsibility)? The Mauritian financial sector is currently in limbo. But while waiting for an answer to this question, operators are discussing the risks that this tax could entail. Particularly in terms of the competitiveness of the Mauritian jurisdiction, they warn.

Indeed, the introduction of a new tax on corporate climate responsibility, equivalent to 2% of the profits of a company whose turnover is greater than or equal to Rs 50 million, is raising eyebrows. It is with this in mind that Mauritius Finance requested a meeting with the Minister of Finance. Shamima Mallam-Hassam, president of the organization, explains that the goal is to have more clarification on this subject. “We work with the Ministry of Finance and the Ministry of Financial Services. We have already expressed our concerns to Minister Bholah who is responsible for Financial Services. Concerning the CCR, as it is a tax, this concerns the Ministry of Finance,” she says.

Indeed, the detailed mechanism for applying and calculating the CCR tax has not yet been provided. Will it be applied in the same way as the existing CSR, which is calculated at 2% of a company's previous year's taxable income?

Shahed Hoolash, Managing Director of Vistra, is of the opinion that if Global Business Companies fall under the CCR, it will be problematic for the Mauritian financial sector. “Competitors from Mauritius, which are the Cayman Islands or Jersey, have no tax. Some companies have nothing against the fact that their accounting profits are taxable at 15%. There are also unrealized profits. How will these be taxed? ” he asks.

Adverse factors

The majority of Global Business companies have a turnover exceeding Rs 50 million. A new tax of 2% would represent an additional cost for them. Shamima Mallam-Hassam fears this will have consequences. “Global Business companies have options. Each of them will analyze the scale that a new tax could have,” she explains. The CCR, if applied to Global Business companies, will only deteriorate the competitiveness of the Mauritian jurisdiction.

The president of Mauritius Finance notes that the cost of doing business in Mauritius, which takes into account in particular an increase in the cost of compliance, is not favorable to the Mauritian financial center. Hence the need, according to Shahed Hoolash, for clear and rapid explanations to be provided by the Mauritian authorities. We should, he adds, avoid creating a climate of uncertainty, at the risk of seeing clients turn to jurisdictions where “everything is clear”.

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