Trading Across Borders;

the reform experiences of Mauritius

Presented by

Rajendra Gupta RamnarainSection Head, Customs Department

Mauritius Revenue Authority

Maputo, Mozambique30 June 2014

Outline (Broad)

1. Overview of Mauritius Revenue Authority and Customs Department

2. Doing Business; its importance and data for Mauritius

3. Trading Across Borders & Distance to Frontier Data

4. Main success factors for Mauritius

5. Stakeholders of MRA Customs

6. Customs reforms and modernization

7. Key Performance Indicators

8. Future projects

Mauritius Revenue Authority; an overview

• Corporate body set up under the MRA Act 2004, and became fully operational on 1 July 2006.

• Administers and collects all taxes due in Mauritius within an integrated organizational structure

• 12 departments, including Customs, VAT, Income Tax and other support services such as Finance and Human resource

• 2 specialized divisions; Internal Audit and Internal Affairs – Corporate governance

• Increased salary and better conditions of service to officers

• MEMBER OF WCO – ESA• MEMBER OF WTO (Applying GATT Valuation

since January 2000)• ACCESSED TO RKC IN SEPTEMBER 2008• MEMBER OF SADC• MEMBER OF COMESA• MEMBER OF IOC• PTA with Pakistan and Turkey

INTERNATIONAL AFFILIATION

MRA; organization structure

Ministry of Finance & Economic

Development

MRA Board7 Members

Director General

Management Team

INTERNAL AUDIT

HUMAN RESOURCES & TRAINING

LARGE TAXPAYERSOPERATIONAL

SERVICESFISCAL

INVESTIGATIONSMEDIUM & SMALL

TAXPAYERS

RESEARCH, POLICY & PLANNING

CUSTOMS

INFORMATION SYSTEMS

LEGAL SERVICESFINANCE &

ADMINISTRATION

TAXPAYERS EDUCATION &

COMMUNICATION

OBJECTIONS, APPEALS & DISPUTE

RESOLUTIONS

INTERNAL AFFAIRS

Taxes, fees and levies collected by MRA

• MRA collects 13 different types of taxes, fees and levies

• Collected MUR 61.7 billion which accounts for 90% of all taxes collected in Mauritius

• VAT accounts for the largest proportion- 43% followed by Excise Duty-23%

• Customs Duty accounts for 2%

MRA Customs Department; an overview

• Has a total staff of around 600 officers

• Consists of 10 sections, each managed by a Section Head

• Operations at the port, airport and courier services

• Customs collects roughly 50% of total MRA revenue

MRA Customs; organigram

World Bank’s Ease of Doing Business

• The World Bank’s Ease of Doing Business annual reports investigate regulations that enhance business activity as well as those constraining it in the world economies.

• The aim is to deliver a body of knowledge that will catalyze reforms and help improve the quality of the rules underpinning the activities of the private sector.

• It is a vital tool that allows economies to track progress over time and with respect to each other.

Trading Across Borders

• One important business area of the Doing Business Report of particular interest to Customs is the Trading Across Borders

• It provides valuable indication regarding the efficiency of Customs and border procedures by considering the procedures (in terms of documents, cost and time) involved in trade

• Trading Across Borders, therefore, looks at the impediments to trade, the simplification of Customs procedures and the bottlenecks that hinder economic growth.

Doing Business; data for Mauritius

Index DB 2014 DB 2013 DB 2012 DB 2011 DB 2010

Ease of Doing Business 20 19 23 20 17

Trading Across Borders 12 15 21 22 19

Paying Taxes 13 12 11 12 12

Starting a Business 19 14 23 12 10

Dealing with construction permits 123 62 53 39 42

Getting electricity 48 44 44 - -

Registering property 65 60 67 69 66

Getting credit 42 53 78 89 87

Protecting investors 12 13 13 12 12

Enforcing contracts 54 58 61 61 66

Resolving insolvency (closing a business) 61 64 79 (71) (73)

Trading Across Borders Data

  DB 14 DB13 DB12 DB11 DB10

Ease of Doing Index (Rank)  20

 19

 23

21 17

Ranking in Africa 1 1 1 1 1

Trading Across Borders Data         

Rank12 15 21 22 19

Document to export (no)  4

 5

 5

5 5

Document to import (no)  5

 6

 6

6 6

Time to export (days)  10

 10

 13

13 14

Time to import days10 10 13 13 14

Cost to export ($ per container)675 660 737 737 737

Cost to import ($ per container)710 695 689 689 689

Customs clearance & Technical control for export (days) 1 1 1 1 1

Customs clearance & Technical control for import (days) 2 2 2 2 2

Evolution in ranking for Mauritius

• Doing Business • 20th in DB 2014 as compared to

32nd in 2007

• Trading Across Borders• 21st in 2007 as against 12th in

2014

• 1st position in the Sub Saharan Africa region over the years

Distance to Frontier; Trading Across Borders

• Mauritius is one of the 50 economies which have significantly narrowed the distance to frontier since 2005.

• An improvement of 13.02% is to be noted; the Overall DTF was 61.4 in 2005 and this improved to 74.42 in 2014

• The Trading Across Borders has also improved by 5.20% in 2014 (85.92) as compared to 2006 (80.72)

2010 2011 2012 2013 2014

OVERALL DOING BUSINESS RANKINGRanking 17 20 23 19 20

score

Distance to Frontier 71.11 71.51 71.53 73.6 74.42

TRADING ACROSS BORDERSRanking 19 22 21 15 12

Score

Distance to frontier 84.91 85.50 85.42 85.87 85.92

Main success factors for Mauritius

• Political stability and sustained economic growth

• Sound macro-economic and trade policies

• Secure investment location with established rule of law

• Investment and business-friendly regulatory regime

• Flexible, bilingual (English/French) and skilled workforce

• Social stability with a peaceful and multiethnic blend of cultures

• Gradual elimination impediments to trade-tariff and non-tariff

• Continuous reforms and modernization at Customs to facilitate trade

• Stems from government policy – Customs is the implementation arm

• Attract foreign investment• Meet deadline for delivery of exports• Not a stand alone project• Synergy among different authorities and agencies • Review the role of Customs – 21st century Customs –

bring a change in culture

Reforms & Modernisation of Customs

• Reforms started in late 1980’s – Doing business index started in 2003

• Automation of Customs Procedures – – ASYCUDA IN 1990 – CMS (Customs Management System) EDI IN 1998– CMS II IN 2009– Cargo Community System (September 2009)

Reforms & Modernisation of Customs

Features of CMS

Features of CMS (ctd)

Enhancements done on existing CMS

Changes in CMS with the implementation of CCS

• Valuation database• COR Module in CMS• Passenger Tracking System (e-SITA PNL)• On Line Tracking System in Freeport (OTS)• Second Hand Vehicle Valuation System

USE OF TECHNOLOGY

• NON-INTRUSIVE INSPECTION

• X-RAY SCANNERS INSTALLED AT PORT, AIRPORT, ARRIVAL HALL AIRPORT, PARCEL POST OFFICE, COURRIER HUB, PASSENGER TERMINAL PORT, RODRIGUES

USE OF TECHNOLOGY

• In 2004, MRA Customs started its K9 Unit with four dogs/trainer teams.

• Currently there are six sniffer dogs for drug detection

K-9

• Creation of risk management section – promote and protect legitimate trade

• Introduction of Standard Operating Procedures (SOP)• MRA is ISO 9001 2008 Certified• Implementation of PCA and PCRD• Advance ruling-Tariff and Origin• Regular stakeholders’ meeting• Paperless declarations; CRM (Customs Relationship

Managers)• Publications• Capacity building for internal & external stakeholders

TRADE FACILITATION MEASURES

Rate of Duty Tariff Lines %0 5639 88.855 6 0.09

10 38 0.6015 297 4.6830 64 1.01

Rs 130/U 23 0.36Rs 15/U 7 0.11

Rs 165/U 13 0.20Rs 30,000/U 2 0.03

Rs 30/U 242 3.81Rs 65/U 16 0.25

Total 6347 100

TARIFF STRUTURE

Average Dwell Time For Cargo - 2013

Sea Air

Import- Green 21.6 mins 9 mins

Import- Yellow 2 hrs 28 mins 26 mins

Import- Red 12 hrs 48 mins

10 hrs 13 mins

Export 2 mins 6 mins

CARGO DWELL TIME

Key Performance Indicators

• % of declaration subjected to physical examination –including mandatory examination 12%

• Remaining declaration allowed delivery without examination

• Channels– Pure Green- 30%

– Yellow- 58%

– Red-12%

Key Performance Indicators

Projects in the pipeline

• Acquisition of a weighbridge in the port for risk management purposes

• Acquisition of a new scanner and patrol boat • Introduction of a Deferred Payment Scheme: to

facilitate trade and comply with requirement of the RKC and the WTO Trade Facilitation Agreement

• Acquisition of hand held drug detector equipment to intensify fight against drugs

• Single Window

• Internal Affairs & Internal Audit Division – reports to board

• Declaration of assets – before appointment, promotion; every 3 years

• Open office system• Reduced contact with stakeholders• Cameras in open areas and interview rooms• Paperless and electronic transactions

INTEGRITY

THANK YOU

E-mail: rajgupta.ramnarain@mra.muTel: +230 202 0500 Ext: 1003Fax: +230 216 4918Website: www.mra.mu