taxation in the global economy beps project has focused …

L’HEBDOMADAIRE ÉLECTRONIQUE GRATUITÉDITION 151 – VENDREDI 23 JUIN 2017 L’HEBDOMADAIRE DIGITAL GRATUIT

Pre-Budget Consultations opened till 15th of April

2019-2020

ÉDITION 232 – VENDREDI 15 MARS 2019

BEPS project has focused on tax avoidance rather than what is

arguably an even greater concern:

tax competition

IMF EXECUTIVE BOARD REVIEWS CORPORATE TAXATION IN THE GLOBAL ECONOMY

VENDREDI 15 MARS 2019 | BIZWEEK | ÉDITION 232

ANALYSE BOURSIÈRE3

LUNDI

UBS et ASL en hausseLa séance a témoigné de plusieurs mouvements. Plus d’un tiers de la

valeur totale échangée a été généré par des échanges au niveau du Groupe MCB dont le prix d’action chute de 0,7% à Rs 278 face à des désinves-tissements étrangers de Rs 8 millions. A contrario, la SBM Holdings Ltd se hisse de 4 sous à Rs 6.14. Le prix d’action du Groupe ENL chute de 0,4% à Rs 39. Sur le plan hôtelier, LUX grimpe de 25 sous à Rs 65.75 et Sun Resorts de 0,2% à Rs 45.20. Entretemps, New Mauritius Hotels perd 1,9% pour descendre à Rs 20.50. Par ailleurs, Automatic Systems Ltd grimpe à son plus haut niveau en deux mois à Rs 90.50 (+4,9%) et UBS s’élève à son plus haut niveau en cinq ans à Rs 39 (+2,6%).

MERCREDI

SBM Holdings prend la penteUn article de presse publié dans la matinée serait la cause de cette chute.

Le prix d’action de la SBM Holdings Ltd – qui a ouvert la séance à Rs 6.10 (-0,7%) – devait glisser à Rs 6 (-2,3%) à la clôture de la séance. La répercus-sion n’a pas tardé de se faire ressentir au niveau de l’indice SEMDEX qui atteint son plus bas niveau en 52 semaines (-0,2%). Par contre, le Groupe MCB reste stable en dépit de désinvestissements étrangers d’une valeur de Rs 4 millions. Cim Finan-cial Services gagne 2 sous pour terminer à Rs 6.92. La meilleure performance de la séance est attribuée à United Docks Ltd qui récupère une roupie pour finir à Rs 96. Toujours sur le plan im-mobilier, Grit délaisse 1,5% pour clôturer à son plus bas niveau en cinq mois à Rs 1.35.

JEUDI

Les hôteliers en baisseL’indice SEMDEX perd 0.1% en raison de plusieurs baisses de valeur.

Le Groupe ENL enregistre plusieurs ‘crosses’ à Rs 39.60 avant de clôturer en baisse à Rs 39.65. Les désinvestissements étrangers se sont poursuivis au niveau de la SBM Holdings Ltd dont le prix d’action clôture à Rs 5.98 (-0,3%). Malgré des désinvestissements étrangers à hauteur de Rs 3 mil-lions, le prix d’action du Groupe MCB reste stable à Rs 280. Cim Financial Services grimpe de 0,9% à Rs 6.98. La Mauritius Union Assurance atteint son plus haut niveau en quatre mois à Rs 69.50 (+0,4%). Les hôteliers sont en baisse. LUX perd 0,4% à Rs 65.50. New Mauritius Hotels délaisse 0,5% à Rs 20.40. Southern Cross atteint son plus bas niveau en sept mois à Rs 4.66 (-3,1%) et EUDCOS à son plus bas niveau en 52 semaines à Rs 16.35 (-1,8%).

Jumia, licorne africaine du e-com-merce, pourrait entrer sur la bourse de New York (NYSE) au 1er trimestre 2019, annoncent plusieurs sources faisant état d’une opération qui devrait porter sa valeur financière à près de 1,5 milliard de dollars US.L’introduction de Jumia sur la bourse new yorkaise intervient après celles de plusieurs plateformes de commerce électronique parmi lesquelles Delivery Hero, HelloFresh et Home24 qui, à l’instar de Jumia, sont des filiales de la société allemande Rocket Internet.Jumia a démarré ses activités en 2012 à Lagos pour être présent aujourd’hui sur 14 pays. Son cœur de métier consiste à connecter des vendeurs à des acheteurs, en proposant une dizaine de millions de produits. L’ensemble de l’activité se trouve sur le continent et 99% de ses

collaborateurs basés en Afrique.Les principaux actionnaires de Jumia sont des MTN, Orange, Millicom (Tigo) mais aussi des entreprises in-ternationales comme AXA, Goldman Sachs, CDC Group.

• La Bourse de Londres ouvre stable en pleine confusion autour du Brexit – La Bourse de Londres a ouvert jeudi stable (+0,00%), dans un marché hésitant sur la voie à suivre en pleine confusion autour du Brexit. Dans les premiers échanges, l’indice FTSE-100 des prin-cipales valeurs grappillait 0,30 point à 7.159,49 points.

• Une dernière levée de fonds avant la Bourse pour Uber – Un petit milliard pour la route. Selon le « Wall Street Journal » , Uber serait en négociations avancées pour obtenir au moins un mil-liard de dollars supplémentaires, de la part d’un consortium mené par Softbank, juste avant l’introduction en Bourse de la société, prévue cette année. La somme serait destinée au développement de son unité de voitures autonomes et viendrait s’ajouter aux quelques 24 milliards de dollars levés par Uber depuis sa création.

BIZweekBIZweek

J’AI ENTENDU...

HERRSHA L-BOODHUN

3A N A L Y S E B O U R S I È R E

BIZweekBIZweek

J’AI ENTENDU...

HERRSHA L-BOODHUN

3A N A L Y S E B O U R S I È R E

Jumia pourrait aller sur la Bourse de New York

START-UP AFRICAINE


LA TOUR4

BEPS project has focused on tax avoidance rather than what is arguably

an even greater concern: tax competition

IMF EXECUTIVE BOARD REVIEWS CORPORATE TAXATION IN THE GLOBAL ECONOMY

On February 21, 2019, the Executive Board of the International Monetary Fund (IMF) discussed a paper setting out the current state of international corporate income tax arrangements. The policy paper Corporate Taxation in The Global Economy, released on the 11th of March, explores options that have been suggested for their future development, including several now being considered in global fora and considering the contribution of the Fund

to debates and processes now underway. The paper notes the significant progress made in addressing corporate tax avoidance and enhancing multilateral cooperation, notably by the G-20/OECD project on Base Erosion and Profit Shifting, and the Inclusive Framework that has broadened the scope of coop-eration to many non-OECD countries. At the same time, they noted that there remain shortcomings in current international tax arrangements, and that

many countries face pressures to introduce unilateral action

There has been substantial pro-gress in aspects of multilateral tax coordination. The G-20/OECD BEPS project, launched in 2013, aimed to close gaps in

international tax rules that allowed corporate tax bases to be eroded or artificially shifted to low/no tax jurisdictions. The guiding princi-ple was to “ensure that profits are taxed where eco-nomic activities take place and value is created.” To this end, the project addressed 15 problem-atic areas, with the final ‘BEPS package’ of 2015—endorsed by G-20 leaders—including four ‘minimum standards’ and amendments to core OECD guidance (on transfer pricing, for instance) and delineation of preferred practices (such as on interest deductibility).

To facilitate and support BEPS imple-mentation, the OECD has developed an in-novative multilateral instrument (MLI) that enables simultaneous changes to multiple Double Tax Agreements (DTAs) and estab-lished an ‘Inclusive Framework’ (IF) whose (now 127) members commit to the BEPS package and its consistent implementation, including the minimum standards. Many countries have been very active in ensuring

BEPS-consistency of their rules. There have also, however, been important

unilateral initiatives going beyond BEPS, and in some cases challenging established norms. These include: (a) The adoption of ‘divert-ed profits taxes’ (DPTs) in the U.K. (2016) and Australia (2016), seen by some as early departures from the consensual approach of the BEPS project. (b) The Tax Cuts and Jobs Act, bringing not only a large cut in the federal U.S. corporate income tax (CIT) rate (from 35 to 21 percent) but fundamental and novel changes in its international provisions (Appendix IV)—one of which some have suggested may violate WTO rules and is un-der review for consistency with the BEPS minimum standard on harmful tax practic-es. (c) The adoption and proposal of ‘digital service taxes’ (DSTs) on revenues associated with selected digital activities. These might be seen as attempts to circumvent the norm that only firms with physical presence are li-able to corporate income tax, and it has been suggested that the EU proposal may violate WTO non-discrimination rules.

The BEPS project is not generally regard-ed as simplifying a system that was already

largely incomprehensible to all but the most expert. BEPS implementation, moreover, was seen as creating additional uncertainty for both taxpayers and tax administrations. These concerns are greatly amplified by the measures outside the BEPS outcomes that several countries have adopted or proposed. Dispute is now elevated to the political level, as some measures are seen as being unfair-ly targeted and violating established norms. Talk of ‘tax wars’ is premature—but interna-tional tax relations have rarely been so sour.

Key Problems with Current Arrangements

Revenue losses from profit shifting have been substantial for many advanced econ-omies—and even more so for developing countries. Quantification remains difficult—even the signs of the country-specific effects — but work since IMF (2014) confirms the significance of the issue.

While it is too early to tell what impact re-cent initiatives will have, the scope for profit shifting remains substantial—and unlikely to

diminish. The estimates are ‘pre-BEPS.’ But significant profit-shifting opportunities still arise—most notably, but not only, in relation to the allocation of risk within multi-na-tional enterprises (MNEs), the valuation of intangibles, and the avoidance or limitation of physical presence. With the increasing importance and salience of complex, intan-gible-and technology-heavy business mod-els, these difficulties will only increase. One sign that the fundamental drivers of profit shifting have not been fully addressed is an increasing use of essentially arbitrary quanti-tative limits—such as those under the BEPS interest limitation rules, or even the 10-per-cent return on tangibles specified in the Tax Cuts and Jobs Act.

Tax Competition Continues

The BEPS project and other recent multi-lateral initiatives have focused on tax avoid-ance rather than what is arguably an even greater concern: tax competition. Such com-petition is most evident in trends in statutory

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rates of corporate income tax (CIT), though it takes other forms too (such as special tax incentives). The consequent revenue losses can plausibly outweigh those from avoid-ance. OECD (2015e), for example, estimates an overall revenue loss from avoidance of up to 10 percent of corporate income tax revenue; that would be equivalent to a cut in the statutory rate of around 2.5 percentage points — only about half of what has been observed since 2005, making avoidance hard-er could result in tax competition becoming more intense — particularly for real invest-ments. Whether tax competition is set to intensify remains unclear, though some see the reduction in the U.S. federal corporate in-come tax rate as likely to stimulate rate cuts elsewhere.

Current initiatives, focused on ‘harmful tax practices’ (offering preferential tax treat-ment to firms without economic substance), leave some open questions. The recognition that preferential regimes are not necessarily damaging is consistent with developments in thinking over the last decade. Substance requirements, however, bring their own difficulties: potential tax savings may be so large that companies are willing to allocate whatever resources are needed to pass a sub-stance test, however unproductive they truly are in that use; and tax competition becomes focused on attracting real activities. This re-flects inherent limitations in addressing tax competition only in the form of specific re-gimes; it is increasingly recognized that low/zero taxation have adverse spillover effects.

Developing Countries Face Distinct Challenges

Progress has been made in areas important for developing countries — but complexity

has increased, and profound vulnerabilities remain. The four areas of particular concern identified in IMF (2014) have received atten-tion since, but remain far from fully resolved. Given their vast complexity, however, it can be very hard for many developing countries and small states to implement the new global standards and common approaches of the BEPS package, or even to grasp their full im-plications. This, and dealing with the great-er expertise of multi-national enterprises, is a potential drain on scarce talent needed to address what can be more pressing domes-tic tax issues. Tension arises if countries feel pressured, by the possibility of adverse international “listing”, to divert resources to amend practices that likely have little spillo-ver effect or domestic benefit.

The distinct problems faced by, and capac-ity limitations of, developing countries re-quire tailored responses. The main forms of profit shifting affecting them are less sophis-ticated than those affecting more advanced economies, and tax incentives are an especial-ly prevalent form of tax competition. While external support can help develop capacity, attention is needed to the rules and norms themselves. Capacity limitations put a premi-um on the use of simpler methods to protect developing countries’ tax bases. Not least, their interests—since they host no major MNEs— can be quite different from those of advanced economies. Divergent views are evident, for instance, on source countries’ right to tax cross-border service fees.

Digitalization Poses Challenges

Issues raised by digitalization have become a centerpiece of discussions on the future of international corporate taxation. The context

is the increasing use of digital technologies throughout business and the rise of new business models, exemplified by a few well-known firms heavily dependent on digital technologies — many of them provide a service without charge (though more accu-rately regarded as a form of barter: access to the service in return for personal informa-tion provided in the act of using it). Many of these firms are highly profitable yet have in many cases paid relatively little tax any-where.

Dealing with the corporate tax implica-tions of digitalization and new business models is highly contentious, politically and intellectually. If there was any consensus in the initial G-20/OECD report on digitaliza-tion, as in an earlier report by the European Commission (2014), it was that attempts to isolate for special treatment a ‘digital econ-omy’ (or ‘digital activities’) are misplaced, given how pervasive these technologies are, and so unpredictable is their future devel-opment. The implication was that measures seeking to ‘ring-fence’ a subset of firms or activities would be inappropriate. However, policy in many countries has moved rapid-ly in the direction of short-term measures while the search for a common approach continues at the OECD, a final report to the G-20 being due in 2020.

In the meantime, several countries have adopted or plan some form of ‘Digital Ser-vices Tax’(DST). These vary significantly in detail, but have the common feature of tax-ing turnover from specified activities rather than income. This partly reflects the difficul-ty of identifying associated costs, but also seems intended to keep these taxes beyond the scope of tax treaties.

Alternative Architectures

So fundamental are the challenges to the current international tax system that alter-native futures are now widely discussed—by policy makers, as well as academics and civil society.

A. Evaluating Alternative International Tax Systems

The BEPS objective of “taxing where val-ue is created” is at best an incomplete stand-ard by which to assess international tax ar-rangements. There are circumstances of tax planning in which it may be widely agreed that no value is being created. Beyond that however, the phrase is far from providing the practical guidance needed to answer all questions: the digitalization debate, as seen above, is only the most clear-cut instance in which there is evidently no agreement on where value is created. More fundamental-ly, whenever value is the product of several contributions, there is no unambiguous way to express that value as the sum of distinct contributions. This objective also falls short as a standard of efficiency: if the place in which value is created can be changed, it leaves open the possibility of distortions aris-ing from differences in tax treatment and of collectively damaging competition to attract the ‘value-creating’ activities. There is danger, moreover, that testing for value creation by the presence of production factors will lead to the unproductive allocation of resources in search of tax savings.

The importance of the corporate income tax to low income countries and their greater vulnerability to profit shifting warrants spe-cial attention. Lower income countries tend to be somewhat more reliant on the corpo-rate income tax as a source of revenue than

Smooth functioning of the international tax system requires much consensus — and the alternative architectures above likely require, to differing degrees, more than yet seen. Unilateral and uncoordinated measures of the kind that have begun to emerge threaten to descend into disorder. A coordinated approach is needed to minimize adverse spillover effects in addressing the challenges set out above. To this end, all the alternative futures sketched above require more cooperation than has yet been achieved, though to varying degrees. Movement towards minimum tax schemes, for example, requires far less coordination than would agreement on the weighting to be used in some mechanical split of profits. While the urgent priority is to sustain the increased cooperation in international taxation recently achieved, securing a coherent and productive future for the corporate tax requires deepening it still further.Countries prize their sovereignty in tax matters but accept constraints on it, in both hard law (through the WTO, regional agreements, bilateral double taxation agreements) and soft law (for example in relation to exchange of information and BEPS). They also enter into multilateral arrangements

that enhance their ability to assert sovereignty in administering their tax laws. What is lacking is a comprehensive framework for agreeing and enforcing common views on core aspects of rates and/or bases of taxation as they operate internationally — matters that need to be addressed head on.There are fundamental obstacles to deep agreement on international tax issues. That there is no “World Tax Organization” (though this has had its advocates) likely reflects not simply concerns with sovereignty but structural considerations making it harder to reach international agreement in the tax area than, for example in relation to trade. One is the absence of principles for international taxation as powerful as the case for trade liberalization. Another is that while in trade policy it is the actions of large countries that shape the outcome, in the context of tax competition small countries can clearly have considerable influence. Effective agreement must, somehow, embrace not just a few large players but a large number of potentially small ones. With winners from tax competition as well as losers, side payments (or coercion) may be needed to bring about coordinated

action that benefits all. Coordination among a subset of countries can be helpful, particularly aligning countries around good practices. But it can be less effective in dealing with tax competition, since constraining competition within the group may make its members more vulnerable to tax competition from those outside — creating an incentive not to participate.A caricatured view of international tax history in recent decades is that “the United States takes the lead, the OECD and its members reach a compromise, and the rest of the world follows the OECD.”

Not easy to meet the standards required

It was doubtless natural that the advanced economies, intensely engaged in cross-border investment for decades and with unmatched expertise, play a lead in the evolution of international tax norms. But increased awareness of how important international tax issues are to the revenue prospects of developing countries has led many, including in civil society, to the view that the system over-protects residence countries’ rights relative to those of source countries. All this creates some

unease with the shaping of the system by advanced economies, whose interests sometimes align with those of LICs (in relation to low tax jurisdictions, notably) — but sometimes do not. It can be difficult for non-EU members to accept, for instance, an EU listing process that imposes EU and OECD standards on non-EU members that were not involved in setting them. Substantively too, standards developed for more advanced economies do not necessarily translate easily to the circumstances of developing countries. Some may have difficulty, for example, meeting the standards required to benefit from country by country reporting. More generally, it is important to recognize that, given their deeper challenges in mobilizing revenue, international tax issues are not necessarily such a priority for low income countries as for advanced/emerging economies, and to ensure that pressures to comply with standards driven by those countries do not distract low income countries’ scarce talent and resources away from more pressing revenue needs and wider reform efforts. Addressing current problems requires more effective and inclusive cooperation than in the past—developing which is very challenging.

GOVERNANCE OF THE INTERNATIONAL TAX SYSTEM AND THE ROLE OF THE INTERNATIONAL FINANCIAL INSTITUTION

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“This report should trigger a seismic shift in the international communities approach to corporate tax abuse. It recognises that corporations are paying less than they were even before the financial crisis; that simply plugging holes in the current tax system is not enough, and that deeper reforms are needed, including greater transparency and an end to harmful tax competition. “The baton now passes to the global tax community currently led by the OECD. Its new round of tax negotiations must kick-start the fundamental reforms that are needed and ensure all countries – including developing countries who come off worse under the current tax system – have a real say in the outcome.” “Governments must ensure everyone pays their fair share of tax if they are going to raise the funds they need to deliver on their promises of healthcare and education for all.”Oxfam New Zealand’s Fair Tax Now campaign is demanding our government legislate for greater multinational-corporation tax transparency, through public country-by-country reporting (PCBCR). The IMF report states that such measures

will enable more people, including academics, to see information from multinational corporations and help create a fairer and more inclusive global tax system. As the New Zealand government engages in the Base Erosion and Profit Shifting (BEPS) 2.0 process, it needs to ensure transparency and inclusion is at the heart of tax reform, Oxfam New Zealand Advocacy and Campaigns director Dr Joanna Spratt said. “New Zealand can do its bit by legislating for more transparency from multinational corporations, with the idea that this also supports our Pacific neighbours, many of whom have small tax administration systems.“As New Zealand engages globally on further tax reform, we must remember that despite the efforts to bring in developing countries, thus far it’s been the more advanced economies that have driven tax reform. “We agree wholeheartedly with the IMF in that while some improvements can be achieved within nations and regions, stronger institutions for global cooperation are required in order to achieve the fundamental tax reform that is needed.”

New IMF Report should trigger seismic shift, says OxfamSusana Ruiz, Oxfam International’s Tax Expert, responded to the publication of the new IMF report on corporate tax. “The IMF report confirms what Oxfam has being saying for years – that the international tax system is broken and needs fundamental reform.

are other countries. Moreover, any reduction in their corporate income tax revenue may be hard to replace: of their main revenue sourc-es, the VAT in many cases is already under stress, the personal income tax remains weak and reliance on trade taxes is already high.

B. Minimum Tax Schemes

“Minimum taxation” refers here to schemes ensuring that profits are subject to some minimal level of taxation — and so tar-get, primarily, profit shifting. These can apply to outbound and/or inbound foreign direct investment; both are envisaged in a proposal by France and Germany.

For low income countries, simple meas-ures protecting against base erosion on in-bound investment can play a critical role—as part of the core system, not an alternative minimum. Few substantial multi-national enterprises are headquartered in low income countries, but many multi-national enterpris-es operate there—making inbound rules of the essence, with simplicity the key to effec-tiveness in an environment of constrained capacity. This calls for straightforward meas-ures of base protection as part of the core system, combined with the minimum taxes (directed mainly at domestic avoidance and evasion) that many developing countries already have—and which are often recom-mended in IMF technical assistance.

C. Border-Adjusted Profit Taxes

Several alternative architectures involve some element of ‘destination-based taxa-tion’: the allocation of some taxing rights to the jurisdiction in which the purchaser is lo-cated. No such taxing rights are allowed un-der current norms, and their possibility was barely considered before the U.S. House pro-posal mentioned above. Now they are part of the policy debate, with shades of destina-tion-based taxation evident in recent develop-

ments. The Tax Cuts and Jobs Act, for exam-ple, applies a reduced rate to export earnings and limits some deductions for payments abroad. And the notion of user participation as creating a taxing right, though conceptually quite distinct, in practice allocates some tax-ing rights to jurisdictions in which final users of a product are located. Indeed, and though doubtless unintended, the call to tax where value is created might seem to imply some taxing rights in the destination country since there is no value without buyers.

D. Formula Apportionment

Under formula apportionment (FA), ac-counts of all a company’s affiliates are con-solidated to generate a unitary tax base that is apportioned across jurisdictions on a for-mulaic basis. Jurisdictions then apply their own tax rate to the apportioned base. Sub-national business taxes commonly work by FA, notably in Canada, Germany, Japan, and the U.S. In Canada, for instance, the unitary base is apportioned across provinces—by commonly agreed rules—payroll and sales, with special weights or formulae applying to certain sectors (such as insurance, banking, and transportation). The provinces retain autonomy to apply their own credits to the apportioned tax base. In the U.S., states can choose different weights for assets, payroll, and sales; and these may vary by sector; Alas-ka, for instance, uses an origin-based sales factor for extractive industries.

The conceptual and practical difficulties in applying the arm’s length principle have led to proposals to apply FA at the regional or global level. The subnational experiences indicate that, as economic integration pro-ceeds, formula apportionment presents itself as better suited than the arm’s length princi-ple for dividing profits of related companies across jurisdictions. In that spirit, the Euro-pean Commission has proposed a ‘Common Consolidated Corporate Tax Base’ (CCCTB) for the EU.


POST SCRIPTUM7

An overhaul of the international tax system can wait no longer

CORPORATION TAX

The current situation is espe-cially harmful to low-income countries, depriving them of much-needed revenue that would help them achieve high-

er economic growth, reduce poverty and meet the UN’s 2030 sustainable develop-ment goals. Advanced economies have long shaped international corporate tax rules. Yet it is developing countries that are especially exposed to profit shifting and tax competition with limited alter-natives for raising revenue. IMF analy-sis shows that non-OECD countries col-lectively lose about $200bn in revenue a year, or about 1.3 per cent of gross do-mestic product, due to companies shifting profits to low-tax locations. Recent inter-national efforts — notably through the G20 and OECD — have made it harder for multinationals to shift profits to low tax rate locations.

But vulnerabilities remain.The prima-ry vehicle for co-ordinating work on the international tax system issues — the OECD’s “Inclusive Framework” — has more than 125 country members. But while it has made significant progress, pressures from tax competition remain

largely unaddressed. Clearly, we need a fundamental rethink on international taxation.

An IMF paper published Monday anal-yses various options in the context of three key criteria: better addressing profit shifting and tax competition; overcoming the legal and administrative obstacles to reform; and ensuring full recognition of the interests of low-income countries. An immediate impetus for an overhaul has been the rise of highly profitable tech-nology-driven, digital-heavy business models. These rely to a great extent on intangible assets that are hard to value, such as patents or software. They also have less need for a physical presence to do business.

Creation of minimum-tax schemes

The challenges extend beyond the pro-viders of digital services, but these mod-els highlight two outdated assumptions about the international tax system. First, that income and profits are necessarily linked to physical presence. And second, that transactions inside a complex cor-

porate group can be valued based on an objective market benchmark.

So, what are the options for fixing the system? Here are two ideas under dis-cussion. First, to create minimum-tax schemes. One approach — for companies investing outside their home country — would be to reduce the scope for shifting profits to low-tax locations. This would limit competition by ensuring that a mul-tinational’s home country imposes at least some tax, no matter where the profit is made. Another approach, applying to inbound investment, could allow low-in-come countries to retain more revenue by imposing minimum withholding taxes on cross-border payments, such as fees for services charged by parent companies to local subsidiaries. Of course, in the lat-ter case trade-offs will arise between tax-ing and attracting foreign investment, so co-operation is desirable.Second, to create a system that fully taxes routine profits — something like a normal return on investment — on basic activities in the country in which they take place, while splitting any remaining profits among all the relevant nations.

Restoring faithThis is the “residual profit allocation”

approach. Determining how to allocate the above-normal profit is key here, and would require multilateral agreement. Using a formula for this purpose would introduce a new element into the interna-tional system. This method could include value created in the destination or mar-ket country — where the users of servic-es or more traditional customers — are located.

How can the IMF help? The fund gives technical support on tax issues to more than 100 countries every year; it focus-es on the economic impact of taxation; and it has a near-universal membership, which gives it a better understanding of the particular problems facing developing countries. So it is well placed to help its 189 members design more efficient and effective tax systems.The bottom line is that the current international corporate tax architecture is fundamentally out of date. By rethinking the existing sys-tem and addressing the root causes of its weakness, all countries should benefit, including low-income ones. At the same time, we can restore faith in the fairness of the international tax system.

CHRISTINE LAGARDEMANAGING DIRECTORINTERNATIONAL MONETARY FUND

The public perception that large multinational companies pay little tax has led to political demands for urgent action, the head of the IMF writes in the Financial Times on Monday. The call for a new approach is intense, and with good reason. The ease with which multinationals seem able to avoid tax and the three-decade-long decline in corporate tax rates compromise faith in the fairness of the international system


DEBRIEF9

Her Majesty Queen Elizabeth II has recognised Ali Jookhun, rep-resenting Mauritius, as the 83rd Commonwealth Point of Light in honour of his exceptional vol-untary service supporting those with Down Syndrome and raising awareness of disability rights.

Ali created the only network in Mauritius where people with Down Syndrome can meet each other and find support about the condition. Drawing on his ex-perience caring for his late twin daughters who were both born with multiple disabilities, Ali has led the network since 1993 and provided its 75 members with vi-tal advice about education and healthcare. The network has signif-icantly improved the lives of over 1,500 people with disabilities in the country since its inception and is raising awareness of the issues that affect them through Ali’s an-

nual ‘World Down Syndrome Day’ event. As part of the legacy of the Commonwealth Heads of Gov-ernment Meeting in London 2018, Her Majesty The Queen - as Head of the Commonwealth - is thank-ing inspirational volunteers across

the 53 Commonwealth nations for the difference they are making in their communities and beyond, by recognising one volunteer from each Commonwealth country each week in the two years following the summit.

Our country and the population at large are en-joying the fruits of strong, effective and ap-propriate economic, social and environmental

policies. Economic growth is resilient, the unemploy-ment rate is falling, inflation is under control, poverty is declining, income inequality is being reduced and the country’s infrastructure is being modernised.

These achievements have been possible due to the cooperation and dedication of the population and all stakeholders. This year again, the Ministry of Finance and Economic Development believes that the nation-al budget must not only reflect the development goals of Government but also and most importantly, the aspirations and priorities of the citizens of the Re-public of Mauritius.

The Ministry therefore invites people from all walks of life, Business and Trade Associations, Pro-fessional Bodies, Trade Unions, NGOs, Civil Society Organisations and other stakeholders to share their

ideas and make suggestions in the context of the preparation of the forthcoming Budget by having in mind these priorities.

The priorities of the 2019/2020 Budget are, in-ter alia, about: expanding and modernising our in-frastructure; dealing with the challenges facing the sugar and manufacturing sectors, including textiles; investing in new pillars of growth, in particular AI technologies; encouraging a new culture of entre-preneurship; further opening up and integrating our economy with the rest of the world; investing in the education, training and other skills needed by our youth, so that they are better prepared for the future; addressing the impact of demographic change; pro-moting gender equality - “Think equal, build smart and innovate for change”; promoting a more inclusive and eq-uitable society and further addressing the problem of poverty; and building greater resilience to the impact of climate change.

Pre-Budget Consultations open

till 15th of April The annual exercise has started. The Ministry of Finance and Economic Development has

issued a communiqué on Wednesday to announce that the pre-Budget consultations for year 2019-2020 are on. Suggestions and proposals to be made by 15th of April 2019

2019-2020 Clinique Darné et Wellkin Hospital, partenaires du « Be Healthy with Rotary »

Dans le but d’encourager les Mauriciens à être plus consciencieux de leur santé et de promouvoir la bonne pratique des contrôles de santé préventifs, le Mega Health Camp «Be Health with Rotary» s’est tenu le samedi 9 mars au Bazaar de St Pierre de 9h à 16h. Cette initi-ative est le fruit d’une collaboration entre les clubs Rotary d’Ebène, de Beau-Bassin / Rose-Hill, de Phoenix, Floréal et Rose-Belle, ainsi que d’importants acteurs du secteur de la santé, notamment la Clin-ique Darné et Wellkin Hospital. Le Mega Health Camp a vu la par-ticipation de plus de 700 membres du public, venant de la région de St Pierre et Moka et d’autres parties de l’île, qui ont pu bénéficier de tests médicaux gratuits et de consultations avec les médecins des deux cliniques.

Emtel met toute la famille d’accord avec son nouveau forfait

‘FAMILY PLAN’. Derrière cette ap-pellation se trouve le nouveau forfait fa-milial proposé par Emtel. Selon ce nou-veau plan, un individu pourra acheter un forfait et inclure jusqu’à quatre membres de sa famille, ou quatre de ses amis, et en-semble, ils pourront partager un forfait comprenant les appels, des SMS et un package Internet. En sus du forfait, ils pourront s’appeler et s’envoyer des SMS gratuitement et en illimité. Lancé le 19 février, le forfait ‘FAMILY PLAN’ est disponible uniquement sur abonnement (postpaid).

Nespresso renouvelle son partenariat avec le Festival Culinaire Bernard Loiseau

Pour la sixième année consécutive, la célèbre marque de café Ne-spresso aura l’immense plaisir d’être l’un des principaux partenaires de la plus grande fête culinaire de l’océan Indien, le Festival Culinaire Bernard Loiseau. Au rythme de dîners somptueux et d’extraordi-naires performances culinaires, Nespresso, représentée par Scott & Co Ltd à Maurice, pourvoira comme d’habitude aux participants et aux invités les meilleurs cafés, tout en organisant son concours Café Gourmand by Nespresso. Le directeur de Nespresso à Maurice, Réun-ion et Mayotte, Luigi Peccini, est fier de participer une nouvelle fois à ce festival : « Le Café Gourmand by Nespresso s’aligne aux valeurs et exigences de Nespresso et de Scott, et est maintenant un rendez-vous incontournable au Festival Culinaire Bernard Loiseau. »

Une experte italienne en charcuterie pour vous servir au LUX* Grand Gaube

La charcuterie n’est pas qu’un simple produit. C’est une spécial-ité qui demande un savoir-faire souvent transmis de génération en génération. C’est, en effet, tout un art gastronomique que le LUX* Grand Gaube invite les amateurs de bonne chère à découvrir ce same-di 16 mars au restaurant Palm Court. Pour faire apprécier les subtil-ités de ces plats, LUX* Grand Gaube a fait appel à Elisa Pedrazzoli, experte italienne en charcuterie qui vient d’une longue lignée de pro-ducteurs de viandes nobles et est l’une des responsables de Salumificio Pedrazzoli.

Her Majesty The Queen recognises Mauritian volunteer with Commonwealth Points of Light award

Le coup d’envoi de la 14e édi-tion du Festival Culinaire Bernard Loiseau (FCBL) sera donné de-main samedi 16 mars. Le festival, devenu un événement phare du calendrier gastronomique local, se déroulera jusqu’au 24 mars au Constance Belle Mare Plage et au Constance Prince Maurice. Ce-

tte année, le festival innove avec, notamment, une compétition ouverte au grand public, mettant ainsi en valeur la cuisine locale, à travers le concours du meilleur gâ-teau piment de l’île Maurice, dont la finale se tiendra le dimanche 17 mars. Le tirage au sort des équi-pes et la visite du marché de Flacq

auront lieu le dimanche 17 mars. L’un des moments forts du FCBL sera indiscutablement l’épreuve du concours culinaire qui se tien-dra le jeudi 21 mars. Le festival atteindra son apogée le samedi 23 mars avec la cérémonie de remise des prix aux gagnants des dif-férentes épreuves.

Constance Hotels lance la 14e édition du Festival Culinaire Bernard Loiseau


DEBRIEF10

Campagne ‘Rise & Shine’ de l’Union européenne

La Délégation de l’Union européenne a marqué la Journée in-ternationale de la femme avec le lancement de la campagne « RISE&SHINE. » Plusieurs invités de marque étaient présents à la Résidence de l’ambassadeur à The Vale pour un cocktail qui s’est déroulé dans une ambiance conviviale. La soirée a été ponctuée du discours de S.E. Mme Marjaana Sall, ambassadeur de l’Union eu-ropéenne auprès de la République de Maurice, qui a rappelé « l’im-portance de l’égalité de genre pour l’Union européenne et ses actions con-crètes à Maurice en faveur de l’égalité hommes femmes », et que L’Union européenne a à cœur le développement économique et social du pays, « promouvoir l’égalité entre les hommes et les femmes est l’une de nos priorités ». Pour ce faire, l’Union européenne met l’accent sur quatre piliers phares que sont l’égalité entre les hommes et les femmes, la lutte contre la violence faite aux femmes, l’autonomisation économi-que et sociale des femmes et les droits humains.

Dans ce sens, l’Union européenne agira sur plusieurs fronts cette année, et prépare des évènements notamment lors de la Journée de l’Europe; le 9 mai prochain, ainsi que les 24 et 25 novembre avec une marche silencieuse à l’occasion de la Journée internationale pour l’élimination de la violence à l’égard des femmes.

La Pirogue Hotel receives British Airways Customer Excellence Award

La Pirogue received an overall score of 9.0/10 and bagged the Bri- tish Airways Customer Excellence Award for 2018. This award comes from unbiased customer reviews and is designed to showcase the ho-tels that make their guests the happiest. British Airways Holidays has gathered over 80,000 independent hotel reviews this year. In 2018, British Airways awarded close to 450 Customer Excellence Awards across the globe to recognise their top-rated hotels. British Airways Holidays is one of the UK’s leading tour operators. As part of its commitment to providing high-quality holidays, British Air-ways uses customer feedback to find its top-rated hotels. Reviews are only collected from genuine British Airways Holidays customers, who are asked to score hotels based on location, service, cleanliness, and sleep quality.

‘Balance for better’, says ACCA

ACCA (the Association of Chartered Certified Accountants) paid a special tribute to its first female member Ethel Ayres Purdie on International Women’s Day on 8 March 2019. ACCA was the first professional accountancy body to admit a woman into member-ship in 1909 in the UK. Ethel went on to become the leading pro-vider of income tax advice to women, eventually operating as the Women’s Taxpayers Agency. Helen Brand OBE, ACCA’s chief ex-ecutive, said: “On International Women’s Day we are paying tribute to our first female member Ethel Purdie, who worked tirelessly to achieve balance in the accountancy profession. As we celebrate International Women’s Day 2019, we recognize that ACCA is fortunate in our strong position when it comes to balance - 46% of ACCA members and 56% of ACCA students are women, and our Council and executive team are also balanced in terms of men and women. Opportunity and diversity are two of our core values that continue to guide our work today.”

Baptisés « Magenta Park » et « Magenta Promenade », ces deux projets qui feront à

terme 15 hectares et plus d’un kilomètre de long respectivement, seront de véritables poumons verts dans la ville de Uniciti, offrant aux habitants de la région ouest un formidable lieu de rencontre et de détente. La première phase de travaux vient d’être entamée avec une livraison prévue dès la mi-2019.

L’un des piliers du concept de Uniciti est la création d’une ville verte durable. Partant de ce pos-tulat, un inventaire a été réalisé en 2016, répertoriant l’ensemble des caractéristiques du paysage du site de la ville en devenir du Groupe Medine. Les masterplanners ont travaillé, à partir de cet inventaire, sur l’intégration du réseau vert

existant dans la conception de la ville intelligente, et ce en utilisant les plans d’eau et en préservant les corridors écologiques existants, ain-si qu’en créant un réseau de parcs, de places et de pistes cyclables et piétonnes, bien connecté.

De toute cette réflexion est née l’idée d’un parc de plusieurs hec-tares regroupant des milliers d’ar-bres, pour beaucoup endémiques, des vastes étendues d’eau mais aussi un centre culturel et artistique ainsi que des facilités de restauration.

Chemins destinés aux piétons

Reliant l’entrée du futur parc au nouveau passage souterrain (qui traverse actuellement le boule-vard menant de Uniciti à Flic-en-

Flac et qui relie SPARC au cam-pus de Uniciti Education Hub), la première phase de cette fameuse « Magenta Promenade », s’étendra sur 60 mètres de large et près de 400 mètres de long et sera bordée de nombreux arbres et arbustes. Elle comprendra également, en plus de chemins piétons et de pistes cycla-bles, une voie d’eau de 2 mètres de large, encadrée de pelouses afin de souligner la longue perspective avec cette fine lame d’eau.

La première phase du « Magenta Park » comprendra, quant à elle, la création d’une pépinière endém-ique de plus de 7,000 m2, d’une zone de stationnement et d’un tronçon de la route entourant le parc, incluant drains naturels ainsi que chemins piétons et pistes cy-clables.

Un poumon vert de 5 hectares au cœur de UnicitiC’est un des développements les plus attendus de cette année pour Uniciti, la Smart City du Groupe Medine. Des travaux majeurs viennent en effet d’être entamés pour l’aménage-ment d’un parc et d’une promenade qui vont marquer le paysage futur de la ville

DÉBUT DES TRAVAUX DE « MAGENTA PARK »

Moka Smart City : Succès immédiat pour la zone commerciale de Bagatelle

La zone commerciale de Bagatelle, située à l’ouest de l’autoroute au cœur de la Smart City de Moka, s’est rapidement matérialisée et attire de plus en plus d’en-treprises. 15 terrains viabilisés et en toute propriété ont été vendus en peu de temps. Deux bâtiments com-merciaux sont sortis de terre et sont opérationnels. Ce développement souligne la volonté d’ENL de diver-sifier les activités économiques au sein de la ville afin de générer de nouveaux emplois. Le développement de Moka a débuté il y a plus de 10 ans par le groupe ENL et a reçu sa certification Smart City depuis 2017. L’année 2018 a fait émerger de nouveaux projets mais aussi de nombreuses réalisations concrètes. Parmi ces dernières, le quartier de Bagatelle qui attire de plus en plus d’entreprises dans le secteur du commerce.


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How can an organisation produce faster, with less effort and more inspired people by implementing LEAN?

How can we better manage customer expectations and improve quality? How can we shorten up our process timescales? How can we

optimise the way our teams work? These are some of the key questions most or-ganisations are confronted with every day - and answer with more or less success. But what if all these questions could be addressed with one word only: ‘LEAN’

LEAN Thinking is a philosophy – a way of thinking that originated within the manufacturing industries and has since been adopted by public and private ser-vice organisations to better manage their processes and make their organisations more competitive. But what does ‘being LEAN’ really mean and how can you ap-ply this way of thinking to improve your own organisation?

LEAN is a systematic method for waste minimization (“Muda”) within a manufacturing system and service

organisation without sacrificing produc-tivity, which can cause problems.

To accomplish Zero-waste with the view to provide perfect value to customers through a perfect value creation, LEAN thinking changes the focus of manage-ment from optimizing separate technol-ogies, assets, and vertical departments to optimising the flow of products and ser-vices through entire value streams that flow horizontally across technologies, as-sets, and departments to customers.

Eliminating waste along entire value streams, instead of at isolated points, cre-ates processes that need less human ef-fort, less space, less capital, and less time to make products and services at far less costs and with much fewer defects, com-pared with traditional business systems.

LEAN is also a powerful staff engage-ment tool as it seeks to equip them with the skills and methods to solve their own problems, thus increasing their morale

and engagement within organisations.LEAN means many different things to

many different people but today’s LEAN thinking as we know it is built around 5 main principles:

1. Identify value in the eyes of the customer

Contrary to what many believe, LEAN is not a set of tools organisations use to downsize their organisation and reduce costs by all means. LEAN is about cre-ating value for your customers and this starts by understanding what your cus-tomers truly want.

Do you often ask yourself customer re-lated questions such as:• What do our customers expect from

our services?• What do they really value?• What would they be prepared to pay

for?2. Identify the value stream

What are the steps required, end- to-end, to satisfy a customer requirement?

A value stream consists of all of the blocks of activity or processes required to design, order and provide a specific prod-uct, from concept to launch, order to de-livery into the hands of your customers. and flagging the ones that seem to take too much time.

3. Make the remaining steps flow • Mapping your value streams• Reducing hand-offs or automating

mundane and repetitive tasks • Analyse a value stream with a view to

reducing timeframes • Identify areas of cost improvement,

Would our customers be prepared to pay for this?

n Does this activity consume resources but ads no value to our customers?

n Is this an activity our customers would consider as waste but that we still have to action (e.g. regulation)?

4. Have the right resource at the right time

Producing to customer demand is vital to maximise your resources. n Is there a seasonality pattern we can

associate with our services/products?n Can we rely on historic data to back

up our findings?n How easy would it be to cross-train

our teams to ensure we maximise our resources based on customer demand? n How does this seasonality pattern

affect other parts of our organisation (think for example support depart-ments such as customer services, fi-nance teams but also returns)?Putting your customers at the centre

of everything you do also means organ-ising your production, your stocks, your back-office resource around these needs to be more efficient and effective, to the direct benefit of your customer and your organisation.

5. Aim for perfectionWhilst we should always try to improve

everything, we do to satisfy our customers and in turn make our organisations more efficient, it is important to note that as customer expectations evolve constant-ly, this search for perfection cannot end – organisations can only move closer to perfection with a view to becoming more competitive by offering a better service/product to their clients.

LEAN system is affiliated with the Lean Competency System (LCS) from the pres-tigious Cardiff University in the United Kingdom. Designed as a progressive sys-tem, the LCS is the only university ac-credited framework to qualify individuals based on their knowledge and practical application of Lean competency. At the end of a LEAN workshop programme, delegates can sit a multiple-choice test and if successful with gain formal Lean Certification at level 1a of the LCS.

LEAN Thinking, when applied correct-ly, has many benefits for both manufac-turing and services organisations. Enrol on our LEAN Thinking Workshop to find out more about this methodology and start to learn an improvement mindset – link to the website/online brochure

Woolich Education:18, Deschartres StreetPort Louis. [email protected]. www.woolicheducation.comTel. 214 2747, 214 1169, 21425105779 1542, 5812 9043

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