G/SCM/N/299/MUS  
 
29 November  2016 
(16-6571) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original: English  
  
 G/SCM/N/299/SLV  
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SUBSIDIES  
FINAL TRANSPARENCY NOTIFICATION (FOR 2015) PURSUANT TO  THE PROCEDURES IN  
THE GENERAL COUNCIL DECISION IN  DOCUMENT WT/L/691 ON THE EXTENSIONS  
UNDER  SCM ARTICLE 27.4 OF THE TRANSITION PERIOD  FOR THE  
ELIMINATION OF EXPOR T SUBSIDIES  
MAURITIUS  
The following communication, dated 25 November 2016, is being circulated at the request of the 
Delegation of Mauritius . 
 
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THE FREEPORT SCHEME  
1. Description of the scheme  
 
Corporate Tax Exemption to Freeport Operators and Private Freeport Devel opers  but not to Third 
Party Freeport Developers.  
 
2. Period covered by the notification  
 
January 2015 -December 2015.  
 
3.  Policy objective  
 
The decision to extend the income tax exemption for Freeport operators was announced in Budget 
Speech 2012 as a res ult of the persistence of the euro -zone crisis – an external shock which has a 
more menacing impact on our economy, especially on our export sector.  
 
The Freeport is an important link to the regional and international economy and to embrace the 
role as a r egional trading hub the government has in 2012 decided to delay the application of the 
normal tax rate to Freeport operators indefinitely.  
 
The tax exemption has been maintained for an indefinite period in 2015 for the following reasons:  
 
 The persistent in ternational fragile economic situation;  
 
 Continued uncertainty on the international front especially with the exit of Britain from the 
EU which is the most important export market of Mauritius in terms of exports and one of 
the most important markets in te rms of tourist arrivals. With the deterioration  of the pound 
sterling as a result of Brexit, Mauritius revenue derived from exports and tourists arrivals 
have contracted significantly. A loss of export o rders has also been witnessed. There is huge 
uncertai nty regarding our terms and conditions of future exports to the UK as it is not clear 
whether UK will preserve the benefits of the International Econom ic Partnership Agreement. 
To continue to give a boost to exports, the Freeport Scheme will have to be mai ntained.  
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  4. Background authority and legal basis  
 
a. Background authority for the Scheme  
The Board of Investment and the Mauritius Revenue Authority.  
 
b. Legal basis  
Income Tax Act 1995.  
 
5. Form of subsidy  
 
Corporate Tax exemption on income derived from the re -export and export of goods  and other 
activities carried out in a Freeport zone . Income derived from sale on the local market, i.e . outside 
a Freeport zone, is taxable at the standard tax rate.  
 
6.  Beneficiaries  
 
Freeport Operators and Private Freeport De velopers.  
 
7.  Subsidy per unit or total amount  
 
The Government suffers no effective loss of income due to foregone taxes since these activities 
would not have taken place in Mauritius without the existence of the Freeport and its related 
incentives.  
 
8. Duration of subsidy  
 
Duration not specified.  
 
9.  Assessment of trade effects  
 
This incentive has contributed and is continuing to sustain the development of the Mauritius 
Freeport.  
 
ACTION PLAN FOR THE ELIMINATION OF EXPOR T SUBSIDIES,  FREEPORT SCHEME: 
CORP ORATE TAX EXEMPTION  
The Republic of Mauritius is fully committed to the process of the elimination of i ts export subsidies 
programmes and in order to comply fully with paragraphs 1(e) and (f) of General Council Decision 
WT/L/691,it has implemented the foll owing measures:  
 
 Out of the 5 programmes where Mauritius was eligible for continuation of extensions under 
Article 27.4 of the SCM Agreement , it has already eliminated the following four 
programmes : 
 
1. Export Enterprise Scheme – Removed in 2009 ; 
2. Pioneer Stat us Enterprise Scheme - Removed in 2009 ; 
3. Export Promotion - Removed in 2009 ; 
4. Freeport Scheme: Customs duty and excise duty concession on Machinery and 
equipment import into Freeport  - Removed in 2010 . 
 
 The only remaining programme is the corporate tax exemp tion under the Freeport Scheme. 
The Scheme was introduced to encourage trading companies to use the Mauritius Freeport 
as logistics and marketing platform for the exportation of their goods to Asian and African 
countries. Provisions were made in 2006 for r emoval of the corporate tax exemption by 
2009. However due to the global economic crisis, the Government of Mauritius had 
maintained the corporate tax exemption to Freeport operators and Private Freeport 
Developers.  
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   The Republic of Mauritius is engaged in  exploring ways of reforming the Freeport Scheme 
and in this regard, a National Committee chaired by the Director of the International Trade 
Division has been set up and includes senior officials from relevant public and private 
organisation.  
 
 A national workshop to brainstorm on the reform of the Freeport Scheme was also held w ith 
the assistance of the WTO. Different proposals regarding amendments to the Freeport 
Scheme were made in the workshop. Consultations with stakeholders on the suggestions 
made in the workshop are ongoing.  
 
 
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