./.WORLD TRADE
ORGANIZATIONG/SCM/Q2/MUS/5
G/SCM/Q3/MUS/8
7 October 2003
(03-5251)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
New and Full Notification Pursuant to Article XVI:1
of the GATT 1994 and Article 25 of the Agreement
on Subsidies and Countervailing Measures
Requests Pursuant to Article 27.4 of the Agreement on Subsidies and
Countervailing Measures to Extend the Transitional
Period for Elimination of Export Subsidies
Replies to Questions from  the EUROPEAN COMMUNITIES
and the UNITED STATES Regarding the Notifications of MAURITIUS1
The following communication, dated 6 October 2003, has been received from the Permanent
Mission of Mauritius.
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Question posed by the United States
Freeport Scheme
We note the amendment to the Freeport Scheme will levy a corporate tax of 15 per cent
and provide “other tax incentives” on Freeport operators.  Could Mauritius please provide
details on what is meant by “other tax incentives”?
Reply
We would like to draw attention to the fact that Freeport operators are not being granted
"other tax incentives ".  Freeport operators are now subject to  corporate tax of 15 per cent similar to
"Export Processing Zone (EPZ) and other tax incentive companies ", as specified in our
Notification.  By way of further elaboration, please note that a tax incentive company is one that is
liable to pay corporate income tax at the rate of  15 per cent.  It includes, for example, an EPZ
company as well as any other company engaged in manufacturing.
Question posed by the European Communities
In a reply to one of the EC´s questions (contained in G/SCM/Q3/MUS/5, dated
27.5.2002) Mauritius stated that in regard to phasing out the programmes a comprehensive
study was carried out by UNCTAD in view of harmonising tax incentive regimes, that the
                                                     
1 G/SCM/N/95/MUS-G/SCM/N/99/MUSG/SCM/Q2/MUS/5
G/SCM/Q3/MUS/8
Page 2
Income Tax Act with regard to export tax credit  was in the process of being amended and that
the tax regime of Freeport Operators will be aligned with EPZ and other manufacturing
companies.  The present notification mentions all schemes as unlimited in time and does not
indicate anything about their duration, but i ndicates an amendment of the Freeport Scheme.
Can Mauritius please provide information on the outcome of the before mentioned
UNCTAD study and the amendments of the Income Tax Act and how these schemes are going
to be phased out according to the extension decision?
Reply
The study commissioned by UNCTAD/UNDP was "A review of Mauritius Fiscal Incentives
for Investment".  The recommendations made by th e consultants would entail major shifts in the
Mauritius taxation approach.  They include, for example, raising the 15 per cent taxation rate on
profits and introduction of taxes on dividend.  Adoption of the recommendations contained in the
report would have wide ranging fiscal, administrative and policy implications and would requiresubstantial legislative amendment.  However, since they are interrelated, they cannot be implemented
on a piecemeal basis.  Consequently, their implementation is still under consideration by the
Government of Mauritius.
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