Mauritian Diaspora : incentive or disincentive? (by Kaviraj Appadu)

Le Mauricien, 12 July 2006

 

Mauritian Diaspora : incentive or disincentive? 

During the past weeks much discussions and debates have taken place around the budget. The challenges for Mauritius are enormous, especially in the present context of globalisation and risk for increased marginalisation. The budget proposal contains a series of interesting measures which obviously need to be debated further.

I was struck, though, by the measures proposed for the Diaspora. The government proposes a number of measures to open up the economy. With regards to the Diaspora, the budget speech states the following : "Encourage the Diaspora to participate in our development by taxing Mauritians on income remitted instead of world-wide income and facilitate their return with a concessionary duty for a car."

I am uncertain whether the Minister or his technicians have given some thoughts to that statement. The statement assumes that the incentive for Mauritians abroad to come and bring their money to Mauritius is a duty free car. This is wrong as I know a lot who would only like to have a bike or a motorcycle, especially in view of preserving the environment. In addition, the statement argues for a tax on remittance. The question is why should Mauritians abroad remit their savings to the Mauritian economy and be taxed for it. In fact, the savings are derived already after tax in the host country. This would mean double taxation. By the way, in a lot of countries where Mauritians are residing, double tax agreements are in place. Some clarity is needed here.

I feel that there is something wrong conceptually here. It is based on emotions rather than economics and probably has been done deliberately to penalise Mauritians abroad who would wish to contribute to the development of the country. In this way, it is a disincentive, and believing that it would boost the interest of Mauritians abroad to remit their money to Mauritius is just an illusion. Why should Mauritians abroad remit their money to Mauritius when they can just move and invest their money freely elsewhere or even in their host country with less bureaucratic hassles and corrupted practices ?

Please Mr. Minister, try to convince me ! I believe that the proposed measures negates in fact the broader philosophy of opening up the economy and expresses a distrust on Mauritians' creativity.

The budget speech makes also reference to IOM as an agency which can facilitate the contribution of the Diaspora. It is good to have hope, but I am uncertain whether IOM can really contribute something. Past experiences have shown that their involvement has been limited to war torn countries and where they have been encouraging refugees to return back etc. It would be worth for Mauritius to assess IOM's experiences in that field prior to expressing confidence in what the organisation can bring to the table.

Kaviraj Appadu

(Member of the Diaspora, Stockholm, Sweden)