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New treaty to curb tax dodging

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New treaty to curb tax dodging

Lesotho has finalized a new tax treaty with Mauritius, alleviating fears that multinational corporations were dodging taxes through shell companies.

The new agreement, which sets out the taxation rules for companies that run Lesotho businesses from Mauritius, came into effect earlier this month.

It replaces a 1997 treaty that, in recent years, the Lesotho authorities complained was unfair.

“The process for renegotiating the treaty was initiated by Lesotho in recognition that the old treaty was compromising Lesotho’s interests and because some of the key elements of a modern tax treaty were missing,” the Lesotho Revenue Authority said.

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