VAT in the Digital Age (VIDA): How a Modernised 1998 Framework Could Strengthen Mauritius’ Tax Ecosystem

VIDA, BEPS¹ and OECD² VAT Guidelines: Building Mauritius’ VAT Readiness for the Global Digital Economy

VAT in the Digital Age — or VIDA — is one of the pressing and relevant tax modernisation projects in the European Union. It seeks to reshape how VAT is collected, reported, and administered in a world where business models are now border and paper free!

But while VIDA is an EU initiative, its vision speaks to all economies — including Mauritius — as we transition deeper into a digital, interconnected marketplace.

 What VIDA Seeks to Do?

VIDA in the EU focuses on three key pillars:

• Digital Reporting and E-Invoicing — to make VAT compliance real-time and fraud-resistant.
• Platform Economy Rules — ensuring that digital platforms (passenger transport and short-term accommodation rental sectors) like Uber, Airbnb or online marketplaces are VAT collectors, not just intermediaries.
• Single VAT Registration — so businesses can operate across borders with less administrative burden.

VIDA implementation is progressive starting in year 2025 extending until year 2035.

These ideas are not foreign to us in Mauritius.  In fact, Mauritius is adapting its VAT framework for the digital economy, particularly following Finance Act 2025/2026, that synchronises with the OECD’s broader work on the digital economy and OECD VAT Guidelines.

Opportunities for Mauritius Alignment with VIDA

For Mauritius, adapting and synchronising its VAT principles and VAT practices to the EU’s VIDA initiative presents both an opportunity and a strategic necessity. As the island economy continues to expand its digital services, e-commerce and cross-border financial activities, its tax system must evolve to ensure that VAT collection remains effective, fair and technologically adaptive. Though Mauritius is not part of the EU, the VIDA reforms provide a valuable benchmark for designing a future-ready VAT framework that keeps pace with the dynamics of the global digital economy.

Following Finance Act 2025-2026, The Mauritius VAT Act already includes several provisions that can serve as stepping stones toward VIDA-like reforms:

1. Digital Services are recently defined ensuring that digital or electronic transactions are within scope.
2. Section 14A of the Mauritius VAT Act,1998 provides for VAT registration of foreign supplier of digital or electronic services through a VAT representative in Mauritius, if the turnover taxable supply threshold of the foreign supplier exceeds or likely to exceed MUR 3 million (USD 66,666 approx.).
3. The Mauritius Revenue Authority’s (MRA) e-filing and e-invoicing systems already provide a strong digital compliance base. The real time e-invoicing reporting could significantly enhance compliance monitoring and reduce VAT fraud. Such systems would enable the MRA to track transaction data in real time, thereby strengthening tax enforcement while simplifying procedures for compliant taxpayers. Implementing e-invoicing standards could also improve data accuracy, reduce administrative burdens, and foster trust between taxpayers and authorities.
4. VAT on the Platform Economy – Currently, a foreign digital or electronic service provider is required to appoint a local VAT representation to fulfil its Mauritius VAT compliance requirements. To ease compliance and improve revenue collection efficiency, VIDA’s approach is to make the digital intermediary platform responsible for VAT collection in specific transactions. Mauritius — could use VIDA’s approach as model.  This would ensure that VAT is collected efficiently at the point of transaction (specifically where the supplier has its own digital platform), closing thus potential gaps in the tax net and promoting a level playing field between local and international service providers. Moreover, such clarity would benefit platform operators by reducing uncertainty and ensuring consistent treatment under Mauritian tax law.
5. Simplified VAT Registration for Foreign Digital or Electronically Supplied Services
   Mauritius operates as a single jurisdiction and thus does not face the complexity of multiple state-level VAT registrations. However, it can still benefit from adopting simplified digital interfaces for foreign suppliers of digital services based on VIDA’s model. For instance, the European Union’s One Stop Shop (OSS) system allows businesses selling goods or services across multiple EU countries to register, declare and pay VAT through a single online portal, rather than maintaining separate VAT accounts in each jurisdiction. If Mauritius were to adopt a similar streamlined digital VAT portal for non-resident suppliers of electronic services—such as streaming platforms, software providers or online education companies—it would simplify compliance for foreign firms while ensuring efficient VAT collection. Currently, it is envisaged that non-resident suppliers would retain the service of a local VAT representative to meet compliance obligations, which can discourage participation or lead to underreporting. A centralised and user-friendly portal would reduce administrative barriers, making it easier for global digital companies to comply voluntarily on registration, sales declaration to Mauritian clients, remit VAT directly in MUR or through supported international payment systems. This would not only improve revenue mobilisation but also strengthen Mauritius’ appeal as a well-regulated, business-friendly jurisdiction for digital commerce.
6. Data and Technology Integration- VIDA also underscores the use of digital tools and blockchain to combat VAT fraud.

For Mauritius, investing in robust digital infrastructure, cybersecurity and taxpayer data protection will be critical to ensure that VAT digitalisation is both efficient and secure. Building capacity within the MRA for data analytics and cross-border information exchange would further align the country with global tax transparency standards and improve its ability to participate in international tax cooperation frameworks. As Mauritius moves toward becoming a smart economy and a digital financial centre, adopting VIDA-inspired reforms would be an ideal opportunity to evolve our 1998 VAT framework into a future ready VAT system (may be one that would be more Africa oriented- why not!) that would:

• Strengthen VAT collection efficiency,
• Promote fairness in digital commerce,
• Reduce the compliance gap, and
• Support sustainable public finances.

Ultimately, the goal is not just to tax digital transactions — but also to digitise the tax system itself!

Rogers Capital – Tax

1. OECD: Organisation for Economic Co-operation and Development
2. BEPS: Base Erosion and Profit Shifting