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硕士毕业论文 Analysis Of Pre And Post Double Taxation Treaty Agreement


To show the significance of DTT in contributing towards the FDI of Mauritius, we have conducted a table highlighting the countries having DTT with Mauritius and the year in which the DTT came in force, which is as follows:

Table 16: Foreign Direct Investment in Mauritius by Country of Origin: 1990 – 2007

First, the large number of countries having double taxation agreements with Mauritius injecting FDI in Mauritius can be observed. By taking into account the date in which the Double Taxation Treaty (DTT) was in force for the countries, a comparison of the volume of FDI inflows pre and post DTT will be carried out. For this analysis, countries which signed the DTT after 1990 will be considered to be able to make the analysis of the pre and post DTT agreement.

In 1993, Malaysia signed a DTT with Mauritius, it can be observed that in 1993 the FDI from Malaysia more than double compared to 1992. However, in 1994 the FDI from Malaysia fell to Rs60 millions representing a 50% decrease in FDI. From 1995 onwards, the FDI inflows from Malaysia followed a cyclical trend of ups and down. One can deduce that the DTT between Malaysia and Mauritius did not have a significant impact in attracting FDI in a consistent basis. Thus, as Eric Neumayer (2006) said, if the expectation of increase in FDI is nil, then the effort spent in concluding DTTs is being wasted since costs will not be recovered. And as Professor Tsilly Dagan argues, the treaties are not necessary for avoiding double taxation. But it may rather be for easing bureaucratic hassles and coordinating tax terms between contracting countries.

South Africa and Mauritius taxation agreement is a clear-cut example that the DTT played a major role in attracting FDI in Mauritius. The DTT between these two countries was in force in 1997. From 1990 to 1996, the average FDI from South Africa was Rs2 million annually. From 1997 to 2007, the average FDI between the two countries was Rs358 million annually. Dubai also increased their FDI in Mauritius following the DTT agreement, the average annual FDI from 1990 to 2005 was Rs18.56 million and after the DTT was signed in 2006, the average annual FDI jumped to Rs585.5 millions. There is a sharp contrast between the two time intervals before and after DTT was in force for each of the two countries, reflecting the importance of the DTT in attracting FDI in Mauritius.

When analysing the table of FDI inflows by countries in table 16, it is found that most of the FDI inflows comes from the countries having DTTs with Mauritius. Hence to some extent, one may say that the DTTs are certainly contributing to the FDI of the country. But as the Professor Rick Krever and Aristidis Bitzenis (2003) said, FDI is not affected by only DTTs (tax/fiscal incentives) but it also depends on certain other factors (non-fiscal incentives) like improvement of domestic infrastructure, promotion of local skills development to meet investor need and expectations, establishment of broad-reaching FDI promotion agencies, improvement of the regulatory environment and decreasing red tape (corruption) and engagement in international governing arrangements.


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