WORLD TRADE  
ORGANIZATION  G/SCM/N/114/MUS 
2 July 2004 
 (04-2850) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Extension Under SCM Article 27.4 of the Transition Period for the  
Elimination of Export Subsidies Pursuant to the Procedures  
in Document G/SCM/39  
 
Updating Notification  
 
MAURITIUS 
 
  The following communication, dated 29 June 2004,  is being circulated at the request of the 
Delegation of Mauritius.  
_______________ 
 
  Pursuant to the Procedures contained in document G/SCM/39 of 20 November 2001 for the 
extension under SCM Article 27.4 of the transition period for the elimination of export subsidies, 
Mauritius hereby submits its notification for the following programmes: 
 
1. Export Enterprise Scheme; 2. Pioneer Status Enterprise Scheme; 3. Export Promotion; 4. Freeport Scheme.  
 The only change in these programmes relates to the Freeport Scheme.  In July 2003, an 
amendment was brought to the Income Tax Act by way of the Finance Act 2003 to further reduce the number of companies operating under the Freeport scheme that are exempt from paying the 15 per 
cent rate of corporate tax.  Thus, companies licensed after 1 June 2002 as Private Freeport 
Developers  and engaged in processing activities have been ma de liable to corporate tax at the rate of 
15 per cent, i.e. same rate as other manufacturing companies. 
  It may be recalled that in the initial notifi cation of Mauritius, all Freeport Operators and 
Developers were exempt from payment of corporat e taxation.  While updating the notification in 
May 2003, Mauritius informed the Committee that legi slation was passed in July 2002 to remove the 
tax exemption in respect of comp anies licensed after 1 June 2002 as Freeport Operators  and 
engaged in processing activities.  The latest amendmen t brought in July 2003 thus reduces still further 
the coverage of the subsidy pr ogramme for the Freeport Scheme. 
  Mauritius confirms that the above programmes ha ve not been modified since 1 January 2004 
so as to make them more favourable in terms of sc ope, coverage and intensity of benefits that it was 
on 1 September 2001.  Accordingly and pursuant to paragraph 1(d) and 1(e) of the Procedures, 
Mauritius invites the Committee on subsidies and Co untervailing Measures to renew the above four G/SCM/N/114/MUS 
Page 2  
 
 programmes for the year 2005.  This notification is  also submitted pursuant to Article 25 of the 
Agreement on Subsidies and Countervailing Measures.   
EXPORT ENTERPRISE SCHEME  
 
CUSTOMS AND EXCISE DUTY EXEMPTION  1. Form of Subsidy
 
 
 Exemption from customs duty and excise duty on scheduled equipment. 
 2. Beneficiaries
 
  Holders of an Export Enterprise Certificate 
 [Export Processing Zone (EPZ) companies]. 
 3. Policy objective
 
  To promote investment in EPZ sector.  
4. Legal basis
 
  Industrial Expansion Act 1993.  5. Background authority for the scheme
 
 
 The Board of Investment and the Customs & Excise Department.  6. Duration of the subsidy
 
  The scheme is not limited in time. 
 
7. Revenue implications
 
  Marginal.  
8. Assessment of trade effects
 
  Negligible.   PREFERENTIAL REGISTRATION DUTY 
 
1. Form of Subsidy
 
  A lower rate of duty (i.e. 5 per cent) on the re gistration of a deed witnessing the acquisition of 
industrial premises and of similar immovable property. 
 
2. Beneficiaries
 
  Holders of an Export Enterprise Certificate  [Export Processing Zone (EPZ) companies].  G/SCM/N/114/MUS 
 Page 3 
 
 
  
3. Policy objective  
  To promote investment in EPZ sector.  
4. Legal basis
 
  Registration Duty Act (as amended in the Finance Act 2000).  5. Background authority for the scheme
 
 
 The Board of Investment and the Registrar General.  6. Duration of the subsidy
 
 
 The scheme is not limited in time. 
 7. Revenue implications
 
  Marginal.  
8. Assessment of trade effects
 
  Negligible.   PIONEER ENTERPRISE SCHEME  
 
CUSTOMS AND EXCISE DUTY EXEMPTION  1. Form of Subsidy
 
 
 Exemption from customs duty and excise duty on scheduled equipment. 
 2. Beneficiaries
 
  Holders of a Pioneer Status Enterprise Certificate 
 
3. Policy objective
 
  The scheme aims at promoting investment in higher technology and encourage the creation of 
more sophisticated support industries and services.  
4. Legal basis
 
  Industrial Expansion Act 1993.  5. Background authority for the scheme
 
 
 The Board of Investment and th e Customs and Excise Department. 
 G/SCM/N/114/MUS 
Page 4  
 
 6. Duration of the subsidy
 
  The scheme is not limited in time.  7. Revenue implications
 
 
 Negligible.  8. Assessment of trade effects
 
 
 Pioneer Status Enterprises cater mostly for th e local market and therefore trade effects are 
insignificant.   PREFERENTIAL REGISTRATION DUTY 
 
1. Form of Subsidy
 
  A lower rate of duty (i.e. 5 per cent) on the re gistration of a deed witnessing the acquisition of 
industrial premises and of similar immovable property. 
 
2. Beneficiaries
 
  Holders of a Pioneer Status Enterprise Certificate.  3. Policy objective
 
 
 The scheme aims at promoting investment in higher technology and encourage the creation of 
more sophisticated support industries and services.  4. Legal basis
 
 
 Registration Duty Act (as amended in the Finance Act 2000). 
 5. Background authority for the scheme
 
  The Board of Investment and the Registrar General. 
 
6. Duration of the subsidy
 
  The scheme is not limited in time.  7. Revenue implications
 
 
 Marginal.  8. Assessment of trade effects
 
 
 Pioneer Status Enterprises cater mostly for the local market and therefore trade effects of the 
duty concession are insignificant.    G/SCM/N/114/MUS 
 Page 5 
 
 
 EXPORT PROMOTION 
 
INCOME TAX CREDIT 
 1. Form of Subsidy
 
 
 Tax credit allowed by way of deduction from income tax otherwise payable by the company, the credit being determined by the percentage of qua lifying export sales to total turnover, and limited 
such that the rate of income tax payable afte r the tax credit does not fall below 15 per cent. 
 
2. Beneficiaries
 
  Any company engaged in the export of goo ds and services which is not a tax incentive 
company.  
3. Policy objective
 
  To encourage enterprises traditionally geared to wards the domestic market to diversify into 
export markets.  4. Legal basis
 
 
 Income Tax Act 1995 (Sections 71 and 72)  and Income Tax (Amendment No. 2) 
Regulations 2000.  5. Background authority for the scheme
 
 
 Income Tax Department.  6. Duration of the subsidy
 
  The scheme is not limited in time. 
 
7. Revenue implications
 
  Negligible.  
8. Assessment of trade effects
 
  Almost all manufacturing and service enterprises (except trading and financial services) are subject to a rate of corporate tax of 15 per cent a nd are therefore not eligible to the export credit. 
  The scheme has become virtually inopera tive and its trade effects insignificant. 
 
 G/SCM/N/114/MUS 
Page 6  
 
 FREEPORT SCHEME  
 
CUSTOMS AND EXCISE DUTY EXEMPTION  1. Form of Subsidy
 
 
 Customs and Excise Duty concession on machinery and equipment imported into the Freeport Zone.  2. Beneficiaries
 
 
 Private Freeport Developers, Third Party Fr eeport Developers and Freeport Operators. 
 3. Policy objective
 
 
 To promote and encourage freeport trade includi ng transit and entrepot trade and to position 
Mauritius as a major regional distribution, transhipment and marketing centre.  4. Legal basis
 
  Freeport Act 2001. 
 
5. Background authority for the scheme
 
  The Mauritius Freeport Authority and the Customs and Excise Department.  
6. Duration of the subsidy
 
  The scheme is not limited in time.  7. Revenue implications
 
 
 The Government suffers no effective loss of  income due to foregone taxes since these 
activities would not have taken place in Mauritius wit hout the existence of the Freeport and its related 
incentives.  8. Assessment of trade effects
 
 
 The scheme has encouraged international comp anies to carry out value added activities such 
as labelling, packing, repacking and mixing in the Freeport Zone.   
AMENDMENTS TO THE FREEPORT SCHEME 
 CORPORATE TAX EXEMPTION 
 1. Form of Subsidy
 
 
 Corporate tax exemption on income derived fro m activities carried out in the freeport zone 
except for freeport operators licensed after 1 June 2002 to carry out any specified freeport processing 
activities.   G/SCM/N/114/MUS 
 Page 7 
 
 
 2. Beneficiaries  
  Freeport Operators engaged in minor processi ng (licensed on or before 1 June 2002) and 
those engaged in light assembly, ship building, repairs and maintenance. 
 
3. Policy objective
 
  To encourage trading companies to use the Mauritius Freeport as a logistics and marketing 
platform for the re-exportation of their goods to Eastern and Southern Africa.  
4. Legal basis
 
  Income Tax Act 1995 (section 49).  5. Background authority for the scheme
 
 
 The Mauritius Freeport Authority and the Income Tax Department.  6. Duration of the subsidy
 
  The scheme is not limited in time. 
 
7. Revenue implications
 
  The Government suffers no effective loss of  income due to foregone taxes since these 
activities would not have taken place in Mauritius wit hout the existence of the Freeport and its related 
incentives. 
 8. Assessment of trade effects
 
  This incentive has contributed to the development of the Mauritius Freeport.  Freeport generated a total trade turnover to Rs. 14.1 billio n for the financial year ending 30 June 2003. 
 
__________