Deloitte promotes Mauritius as tax haven to avoid big payouts to poor African nations

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http://www.rawstory.com/rs/2013/11/02/deloitte-promotes-mauritius-as-tax-haven-to-avoid-big-payouts-to-poor-african-nations/



Deloitte promotes Mauritius as tax haven to avoid big payouts to poor African nations
By Jamie Doward, The Observer
Saturday, November 2, 2013 21:31 EST

A global consultancy giant has been accused of advising big business, including UK firms, on how to avoid paying tax in some of Africa’s poorest countries.

ActionAid has obtained documentation showing that Deloitte, which employs more than 200,000 people in over 150 countries, has been advising foreign companies on how, by structuring their investments through the tropical island of Mauritius, they can enjoy significant tax advantages.

The charity claims that the strategy could help companies to avoid paying hundreds of millions of dollars in tax. Deloitte insists the strategy is not about tax avoidance and attracts much-needed investment to the countries involved.

A Deloitte document, “Investing in Africa through Mauritius”, passed on to the Observer, advises on investing in African companies via the island nation, which has a population of 1.3 million. The document provides the example of a foreign company investing in Mozambique, where more than 50% of the population live below the poverty line and average life expectancy is 49 years. Normally, the foreign company could expect to pay a withholding tax on the dividends flowing back to it from Mozambique of 20%. A sale of its Mozambique investment would see the company liable for a capital gains tax bill of up to 32%.