A Double Taxation Avoidance Agreement (DTAA) and an Investment Promotion and Protection Agreement (IPPA) between Mauritius and Kenya were signed this morning in Port Louis by the Vice-Prime Minister, Minister of Finance and Economic Development, Mr Xavier Duval, and the Minister of Finance of Kenya, Mr Robinson Njeru Githae.
The DTAA which will give a further spur to the positive evolution of economic ties between the two countries will provide greater tax certainty for businessmen while making clear the taxing rights of Mauritius and Kenya on income arising from cross-border economic activities between the two countries. It will also encourage investment flows into Kenya (inbound Foreign Direct Investment FDI) especially from emerging investor countries such as India and China with which Mauritius has attractive tax treaties. The objective is to bring the competitiveness of Kenyan companies at par with that of other African countries already having tax treaties with Mauritius.
As regards the IPPA, it will give a boost to cross-border investment by protecting investors from direct or indirect double taxation, enhance commercial and economic relations and broaden investment opportunities for the business community. It will also make it easier for them to invest capital and repatriate their investments and profits to their respective countries.
The IPPA will cover the key issues such as scope and definition of investment, admission and establishment, national treatment, most-favoured-nation treatment, fair and equitable treatment, compensation in the event of expropriation or damage to the investment, guarantees of free transfers of funds, and dispute settlement mechanisms, both State to State and investor-State.
Speaking on the occasion, the Vice-Prime Minister, Mr Duval, underlined that Mauritius is making a lot of efforts to ensure its contributing to the development of the African continent. According to him, Africa is an emerging market and is growing at a fast pace, registering a growth rate of over 6%. Mr Duval stressed that Mauritius, being an emerging economy and due to its strategic location, has a central role in facilitating trade and investment.
Mauritius is positioning itself as a financial centre of substance in the region in investment and trade sector and investors are encouraged to tap the African market, said the VPM. Mauritius has opened up to foreign inward investment/business with attractive facilitation measures in a number of areas namely, Seafood Hub, Business Process Outsourcing and Integrated Resort Schemes (IRS).
The Minister of Finance of Kenya, Mr Robinson Njeru Githae, for his part, described the agreements as a significant achievement that demonstrates the commitment of both countries towards promoting cooperation and consolidating efforts in areas of mutual interests. He recalled that negotiations between Mauritius and Kenya started two years back and that both agreements will encourage trade and growth among the African countries. The two agreements will encourage Kenyan companies to invest in Mauritius and seek expertise in the fields of sugar, tourism and yacht and ship building, he said.
Mauritius has so far signed 13 Double Taxation Avoidance Agreements and 5 Investment Promotion and Protection Agreements with several African countries.
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