Fiscal Investigations

One of the functions of the Mauritius Revenue Authority is to combat fraud and other forms of tax evasion. To achieve this objective, the Fiscal Investigations Department (FID) has been set up by virtue of Section 3(4) of the MRA ACT 2004.

Fiscal Investigations Department (FID) conducts investigations into potential tax-evasion cases, collects evidence relative to these cases, raises assessments and recommends prosecution for certain types of offences.

For the purpose of ascertaining the tax liability of a person, Section 15 of the MRA Act also empowers the Fiscal Investigations Department (FID) to:

  • enter any premises where any business is carried out;
  • require any person to produce any record, bank statement or other document
  • make a copy of any record, bank statement or other document found on premises
  • retain or seize any record, bank statement or other document

Anti-Money Laundering / Combating the Financing of Terrorism (AML/CFT)

  1. Following the publication of the Mutual Evaluation Report on Mauritius in July 2018 which assessed the level of technical compliance and effectiveness of Mauritius’ AML/CFT system with the Financial Action Task Force (FATF) standards, recommendations were formulated on how the system could be strengthened.

  2. The key recommendations for MRA were as follows:

    1. Make more effort to conduct parallel ML investigations alongside investigation of predicate offences.

    2. Investigate and prosecute tax evasion as a predicate offence of ML and not just concentrate on tax assessment and revenue collection.

  3. In line with the above, in February 2020, the AML/CFT Unit has been set up within the Fiscal Investigations Department (FID) to identify, investigate and prosecute tax evasion cases having a money laundering limb. MRA works in close collaboration with other Law Enforcement Authorities (LEAs) to assist them in the common objective to deter money laundering, as recommended by the Financial Action Task Force (FATF).

  4. The objectives of the Unit are to:

    1. Carry out investigation into cases suspected of tax evasion;

    2. Refer cases of tax offences to LSD for prosecution;

    3. Refer cases of Money Laundering and Financing of Terrorism for Money Laundering (ML) and Terrorist Financing (TF) investigations to ICAC and other Law Enforcement Agencies (LEAs) respectively and for prosecution if applicable; and

    4. Comply with the FATF Recommendations and other international standards as regards investigation and prosecution of tax evasion cases.

  5. Amendments have been brought to the Mauritius Revenue Act by the Finance Act 2021 so that information in relation to money laundering offences will now be exchanged with the Mauritius Police Force (MPF), the Integrity Reporting Services Agency (IRSA) and the Asset Recovery Investigation Division (ARID).

  6. The MRA has also signed Memorandums of Understanding with the Financial Services Commission (FSC), the FIU and ICAC to facilitate exchange of information and referral of cases.

  7. The regulatory and supervisory bodies falling under the Financial Intelligence and Anti-Money Laundering Act (FIAMLA), such as the Corporate and Business Registration Department (CBRD), the FSC amongst others also share and exchange information with the MRA in suspected cases of tax evasion.

Stay of Assessment in Prosecution Cases and Parallel Investigations

Under:

  • Sections 123A and 130 of the Income Tax Act (ITA);
  • Section 7A of the Customs Act; and
  • Section 119A of the Gambling Regulatory Authority Act

the Director General (DG) of the MRA shall not make an assessment in respect of a period beyond 3 years of assessment preceding the year of assessment in which a return of income is made or a validated bill of entry is passed or liability to pay duty or tax arose, respectively.

However, where a return of income has not been submitted or where fraud has been established, the DG may make an assessment at any time.

Similarly, under Section 28A and Section 37(3) of the Value Added Tax Act (VAT Act), the DG shall not make any assessment in respect of a period before 4 years preceding the last day of the taxable period unless the person has:

  1. demonstrated fraudulent conduct;

  2. wilfully neglected to comply with the VAT Act;

  3. not submitted a return under section 22 or section 23 of the VAT Act

In most cases, taxpayers who have not declared and have not paid the correct amount of tax, would be issued with a Notice of Assessment instructing them to pay the taxes due and payable inclusive of penalties and interest or if aggrieved to object against the assessment issued. As such, taxpayers would normally expect the MRA to issue a Notice of Assessment within the time limit specified under Section 130 of the ITA and Section 37(3) of the VAT Act unless in the case of fraud or when a return of income/VAT has not been submitted.

However, under Section 15A of the MRA Act, if cases have been referred:

  1. for prosecution to LSD in respect of offences committed under Section 147 of the ITA, Section 58 of the VAT Act, Section 148(4) or (5) of the Gambling Regulatory Authority Act or Section 131A or 158(1)(b) or (3)(a), (b) or (c) of the Customs Act;

  2. to the ICAC for Money Laundering (ML) offence committed in respect of offences referred at (1) above, 

the DG may stay the assessment to be raised in these cases.

Under such circumstances, the time limit to issue assessment, would not be as specified under Section 130 of the ITA and Section 37(3) of the VAT Act, but would be for an additional period of 2 years from the time limit imposed under Section 130 of the ITA, Sections 28A and 37(3) of VAT Act, Sections 119 and 119A of the Gambling Regulatory Authority Act and Sections 7A, 15 and 24A of the Customs Act.

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