## Section I. Measurement of GBCs in the National Accounts and Balance of Payments

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### A. Overview of the Global Business Corporations in Mauritius
- As of December 2023, more than 13,000 GBCs actively operated in Mauritius.
- Distribution of GBC activities and shares (Financial Services Commission, as of December 2023):
  - Investment Holding: Share (of Assets) 67.1; Number of GBCs 7,549; Share (of GBCs) 56
  - Investment Fund: Share (of Assets) 17.6; Number of GBCs 885; Share (of GBCs) 7
  - International Trading: Share (of Assets) 1.4; Number of GBCs 646; Share (of GBCs) 5
  - Fund Management: Share (of Assets) 0.4; Number of GBCs 384; Share (of GBCs) 3
  - Consultancy: Share (of Assets) 0.1; Number of GBCs 299; Share (of GBCs) 2
  - Other: Share (of Assets) 13.4; Number of GBCs 3,801; Share (of GBCs) 28
  - Total: Share (of Assets) 100; Number of GBCs 13,564; Share (of GBCs) 100
- Ownership and control:
  - Of the 13,564 active GBC license holders, approximately 30 percent are considered to be foreign-controlled (defined as more than 50 percent of equity held by the direct investor directly or indirectly).
  - 70 percent are considered domestically controlled, though majority of shares are reportedly held by nonresidents.
- Main economic linkages:
  - Banking system: deposits, loans, payments services for GBCs.
  - Direct purchases of services from domestic (non-GBC) entities, including professional services.
  - Some employment of residents.
  - Investment in resident (non-GBC) entities.
- Note: GBCs may transact with both residents and nonresidents.

### B. Statistical Treatment of GBCs in the National Accounts
- Recent incorporation and revisions:
  - Statistics Mauritius (SM) and Bank of Mauritius (BOM) recently started incorporating an estimate of output for GBCs in the national accounts and implicit exports of services in the balance of payments.
  - Last comprehensive data inclusion occurred during the 2018 national accounts revision.
  - Latest revision led to an increase in the statistical discrepancy from production and expenditure estimates of GDP.
  - Estimates of output for the ‘sector’ were revised downwards for 2021–2024.
- Published GDP by expenditure (Statistics Mauritius, end-December 2024 — Current Prices: Millions of Mauritian Rupees):
  - 2021 GDP (E) 478,807; 2021 (R) 478,807
  - 2022 GDP (E) 571,194; 2022 (R) 570,301
  - 2023 GDP (E) 658,968; 2023 (R) 641,331
  - 2024 GDP (E) 726,642; 2024 (R) 698,537
  - Final consumption expenditure 2021 432,528; 2021 (R) 432,528; 2022 492,025; 2022 (R) 492,025; 2023 531,975; 2023 (R) 531,175; 2024 570,058; 2024 (R) 568,617
  - Gross fixed capital formation 2021 93,820; 2021 (R) 93,820; 2022 112,806; 2022 (R) 112,806; 2023 158,195; 2023 (R) 140,986; 2024 203,351; 2024 (R) 171,111
  - Change in inventories 2021 951; 2021 (R) 951; 2022 3,857; 2022 (R) 3,857; 2023 -1,304; 2023 (R) -2,173; 2024 1,450; 2024 (R) 850
  - Net Exports 2021 -45,949; 2021 (R) -73,437; 2022 -43,718; 2022 (R) -77,596; 2023 -19,639; 2023 (R) -64,054; 2024 -19,947; 2024 (R) -67,919
  - Exports 2021 211,641; 2021 (R) 184,153; 2022 316,116; 2022 (R) 282,238; 2023 347,837; 2023 (R) 303,422; 2024 359,289; 2024 (R) 322,137
    - Goods (f.o.b) 2021 81,992; 2021 (R) 81,992; 2022 105,524; 2022 (R) 105,524; 2023 103,895; 2023 (R) 103,895; 2024 104,295; 2024 (R) 110,684
    - Services 2021 129,649; 2021 (R) 102,161; 2022 210,592; 2022 (R) 176,714; 2023 243,942; 2023 (R) 199,527; 2024 254,994; 2024 (R) 211,452
      - o/w GBCs 2021 69,995; 2021 (R) 42,500; 2022 84,000; 2022 (R) 50,122; 2023 84,500; 2023 (R) 40,085; 2024 86,000; 2024 (R) 40,797
  - Imports 2021 257,590; 2021 (R) 257,590; 2022 359,834; 2022 (R) 359,834; 2023 367,476; 2023 (R) 367,476; 2024 379,236; 2024 (R) 390,056
    - Goods (f.o.b) 2021 194,313; 2021 (R) 194,313; 2022 265,404; 2022 (R) 265,404; 2023 266,789; 2023 (R) 266,789; 2024 272,957; 2024 (R) 277,582
    - Services 2021 63,277; 2021 (R) 63,277; 2022 94,430; 2022 (R) 94,430; 2023 100,287; 2023 (R) 100,687; 2024 106,279; 2024 (R) 112,474
  - Statistical discrepancies 2021 -2,544; 2021 (R) 24,945; 2022 6,224; 2022 (R) 39,209; 2023 -10; 2023 (R) 35,397; 2024 -28,270; 2024 (R) 25,879
- Source data and classification issues:
  - Data for the ‘GBC sector’ are taken from the ESSNAC survey administered by the FSC and completed by management companies (MCs) for all 13,000 plus GBC license holders.
  - ESSNAC results are collated at the GBC level by the FSC and aggregated into five activity groups based on licensee’s reported activity at application: investment holding companies, investment funds, international trading companies, consultancy companies, and legal and other professional services.
  - Aggregation at application-time activity group leads to misalignment with actual activities; the ‘other’ category accounts for over 28 percent of GBCs and 13 percent of assets and includes service providers with potentially differing NA treatments.
  - Notable inconsistencies and misclassification in ESSNAC responses require validation checks and reclassification (ISIC) at the disaggregated GBC level.

### C. Statistical Discrepancies: Drivers and Data Actions
- Main drivers of discrepancies between GDP (production) and GDP (expenditure):
  - Miscalculation of GBC output and implicit exports of services included in GDP (E).
  - Errors in survey data and misclassification of input costs leading to mismeasurement of implicit exports of services.
  - The estimation method used to compute output for the ‘sector’ (universal sum-of-costs) is inappropriate for several activity types.
- Identified data issues and actions taken:
  - Many items reported as “trade related services” for financial corporations are likely costs attributable to merchanting and should be reclassified.
  - SM staff corrected largest discrepancies during the mission, but further verification is required because source data are received at activity-group level and queries must be routed through FSC to MCs.
  - BOM reportedly developed a workplan to engage SM and FSC on GBC survey data following the mission.
- Mission recommendations for validation and classification:
  - SM to request ESSNAC survey results at the GBC level from the FSC for 2022–2024 and for collection periods going forward.
  - Using disaggregated data, SM (in coordination with BOM) to further review the over 3000 entities in the ‘other’ category and improve classification according to ISIC.
  - SM to conduct appropriate validation of estimates used to compile the output and exports of services for the categories identified during the mission for the 2022–2024 surveys and 2025 when available.
  - Trade-related and ‘other’ costs should be thoroughly investigated by SM alongside BOM and FSC to remove costs that should not be included in output.
  - SM to review the data provided and correct unusually large (unexplained) discrepancies identified during the mission and use revised data in estimation.

### D. Output and Implicit Export of Services: Methodology Issues and Recommendations
- Current practice (SM):
  - Output for all GBCs compiled using the sum of cost approach:
    - Output of the ‘GBC Sector’ = Value Added of GBCs (license fees and rates paid by GBCs to resident authorities + wages and salaries paid out by GBCs to resident employees) + intermediate consumption (recurrent expenses on goods and services paid to resident companies).
    - The output of this sector is currently being totally allocated to exports (implicit exports) on the rationale that shareholders/affiliates are consuming these services.
- Mission concerns and recommended methodological changes:
  - The universal sum-of-cost methodology is not appropriate for:
    - Merchanting corporations
    - GBCs offering consultancy services
    - Some activity types in the ‘other’ category
  - For investment funds, the SNA recommends these entities have no output or intermediate consumption — SM should revise estimates to align with international standards.
  - For holding companies, imports of services are to be included in the sum-of-cost estimates of output.
  - For merchanting, only the margin (difference between sales and purchases) is included in value added.
  - Consulting and other professional services should be estimated using the SNA-recommended approach rather than the current sum-of-cost approach.
  - Implementation requires SM to collect GBC-level data from the FSC.

### E. Merchanting: Statistical Treatment Guidance
- Definition and 2025 SNA guidance:
  - Merchanting is the purchase of goods by a resident from a nonresident combined with subsequent resale of the same goods to another nonresident without the goods being physically moved in and out of the compiling economy.
  - 2025 SNA ¶ 23.13 treatment:
    - Acquisition of goods is shown as a negative export of the economy of the merchant.
    - Sale of goods is shown as a positive export.
    - The difference between sales and purchases of goods for merchanting is shown as “net exports of goods under merchanting.”
  - Output of merchanting GBCs reflects only the margin (difference between sales and purchases), which includes margins, holding gains and losses, and changes in inventories of goods under merchanting.

### F. Mission-Level Priority Recommendations (Action Plan Highlights)
- Selected priority recommendations with target dates and responsible institutions:
  - May 2025: Statistics Mauritius to request ESSNAC survey results at the GBC level from FSC for 2022–2024, and for future collection periods. — Responsible: SM to request GBC-level data from the FSC.
  - September 2025: SM to conduct appropriate validation of estimates used to compile the output, exports and imports of services for the categories identified during the mission for the 2022–2024 surveys (and 2025 once surveys available). — Responsible: SM to conduct consistency checks with the GBC Management Companies.
  - September 2025: Integrate mission’s recommendations to revise estimation of output (and implicit exports of services) for the ‘GBC sector’ and integrate revised estimates in both the national accounts and BOP. — Responsible: SM to revise estimates; validation in coordination with BOM.
  - September 2025: SM and BOM to revise and integrate primary income adjustments for the period 2018–2024 in line with statistical guidance provided by the mission. — Responsible: BOM and SM.
  - September 2025: SM and BOM to prepare a joint dissemination note explaining the revision in the disseminated data. — Responsible: BOM and SM.
  - December 2026: BOM to include estimates of GBC’s reinvested earnings both debits and credits in the primary income (allocation of earned income account) and net acquisition of assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates. — Responsible: BOM.

*Source: IMF Technical Assistance Report – Mauritius National Accounts & Balance of Payments Statistics, Section I.*

### 19–29: Merchanting, GBCs, Investment Funds, and Reinvested Earnings

### Merchanting (ESSNAC survey)
- Findings:
  - The ESSNAC survey provides the value of the good sold under merchanting as well as the associated costs of selling these goods.
  - Currently, estimates related to merchanting activities are reported throughout the various activity types in the ESSNAC survey.
  - Further validation of the ESSNAC merchanting data is needed.
- Mission recommendations:
  - SM to revise the estimates of output for GBCs engaged in merchanting (2021–2024) from the sum of cost approach currently used, to the SNA-recommended approach (margin).
  - BOM to review and validate ESSNAC data via a sample survey to correctly estimate exports of goods under merchanting and include in the BOP.
  - BOM and SM to ensure that the GBC goods data are of an acceptable quality and that they are not double counted in estimates of exports.

### Investment Funds and Holding Companies (2025 SNA / BPM7 guidance)
- Findings and guidance:
  - 2025 SNA (¶7.177 – 7.179) and BPM7 (¶11.79 – 11.81, ¶12.57-59 and box 12.2) provide guidance on treatment of investment funds.
  - Fees for administrators, trustees, and portfolio managers should be treated as payments for services provided directly from the original professional providers to the shareholders; output and intermediate consumption of the investment fund itself equal zero.
  - SM currently uses the sum of cost approach to derive output for investment funds and excludes costs paid to acquire services from nonresidents and costs paid to other resident GBCs from intermediate consumption.
  - SM intends to modify methodology to include the cost of imported services in intermediate consumption (and output), with implications:
    - (i) output from investment funds would increase significantly since a large portion of the expenses of investment funds are paid to nonresidents;
    - (ii) without additional adjustments, this would result in a significant increase in implicit export of services (based on the premise that the majority of the shareholders are nonresidents).
  - For holding companies, international guidelines acknowledge output generated as professional or financial services; current practice uses sum of cost approach and for practical purposes considers fees paid to acquire services from other non-GBC resident entities.
- Mission recommendations:
  - SM to revise the methodology applied to investment funds to align with the guidance of the 2025 SNA / BPM7: output, intermediate consumption, and gross value added of investment funds would be zero; costs paid to acquire services from domestic corporations should be attributed to ‘implicit export of services’ and household final consumption expenditure based on ownership of the fund; services acquired from nonresidents are not included in (implicit) exports of services.
  - SM to revise the methodology used to derive estimates of output (and implicit exports) and imports of investment funds and holding companies.
  - Revise estimates of output for the GBC sector for 2021–2024 after implementing the mission’s recommendations.
  - The allocation of earned income account should show total investment income, the imputed dividend paid to shareholders (including costs paid to acquire services from resident and nonresident units), the actual dividend paid to shareholders, and the remaining investment income attributable to investment fund shareholders.

### Fund Managers, Professional Service Providers, and Other GBCs
- Findings:
  - SM currently uses the sum of cost approach for fund managers and professional service providers and for other GBCs in the ‘other category’.
  - Preliminary assessment suggests at least 10 percent of the GBCs would be removed from the other financial corporations sector and classified to the nonfinancial corporations sector.
- Mission recommendations:
  - SM to revise estimates for fund managers and other professional service providers to the SNA-recommended approach instead of the sum of cost approach.
  - For GBCs in the ‘other category’, SM to use disaggregated FSC data to refine classification before improving methodology.
  - For medium to long term, consider using the classification of GBCs derived from analysis to classify GBCs as an ‘of which’ break out in institutional sector accounts.

### Investment Income and Imputed Dividends Related to GBCs
- Findings:
  - BOM has an estimate of ‘imputed dividend’ for services consumed by nonresident shareholders of all GBCs; Statistics Mauritius agrees with the treatment but has not yet included this imputation in investment income.
  - Imputed dividends apply to investment funds, and to holding companies, merchanting companies, or other entities engaged in professional services.
- Mission recommendations:
  - SM and BOM to compile and reconcile investment income related to holding companies and investment funds and include it appropriately in the balance of payments and national accounts – earned income account (and allocation of earned income account) as interest and dividend income received.
  - SM and BOM to compile and reconcile imputed dividends for investment funds in the earned income account (and allocation of earned income account) of the balance of payments and national accounts.
  - SM and BOM to check actual dividends reported in the ESSNAC survey for consistency and include these in the earned income account (and allocation of earned income account) of the balance of payments and national accounts.
  - SM and BOM to compile and reconcile investment income attributable to investment fund shareholders in the balance of payments and national accounts.

### Treatment of Reinvested Earnings in the Balance of Payments
- Findings:
  - BOM currently does not include reinvested earnings of GBCs in the primary income account of the BOP (debits and credits), citing concerns on impact to current account estimates.
  - In the financial account, reinvestment of earnings of GBCs (net incurrence of liabilities) are included in equity other than reinvested earnings, while GBCs’ reinvestment of earnings (net acquisition of financial assets) are not compiled nor included.
  - The IIP equity positions include reinvested earnings on liabilities only, creating inconsistencies between BOP current account and IIP; IIP shows a surplus while current account shows a sustained deficit.
  - An adjustment is made in the Article IV Staff Report external sector assessment (ESA) for Mauritius to current account balance due to this gap.
- Mission recommendations:
  - BOM and SM to include estimates of reinvested earnings of GBCs both debits and credits in the primary income (allocation of earned income account) and net acquisition of assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates.
  - BOM to prepare a dissemination note – explaining the revisions to the BOP series.
  - If implemented, the current account balance may record a lower deficit or turn to a surplus broadly in line with the adjusted current account balance estimated in the external sector assessment.

### Inter-agency Coordination
- Findings:
  - BOM, SM, and the FSC created a Joint Working Group in 2022 to harmonize GBC treatment; the group has not been active but engaged when required.
  - Validation/consistency checks of the ESSNAC survey results for the 2022–2025 periods and revised methodology for GBCs should be priorities.
- Mission recommendations:
  - Joint Working Group on Statistics between SM, FSC, and BOM should resume quarterly coordination meeting.
  - SM and BOM to continue training the Management Companies and FSC on the ESSNAC Survey.
  - SM to resume annual training of management companies on completing the ESSNAC survey.

### Action Plan: Priority actions and target completion dates (selected items)
- PR Statistics Mauritius to receive ESSNAC survey results at the GBC level from the FSC for 2022–2024 and for collection periods going forward, May 2025
- PR SM to conduct appropriate validation of estimates used to compile the output, exports and imports of services for the categories identified during the mission for the 2022–2024 surveys; and once the 2025 surveys become available. September 2025
- PR Integrate the mission’s recommendations to revise the estimation of output (and implicit exports) for GBCs and integrate revised estimates in both the national accounts and BOP. September 2025
- H SM and BOM to revise and integrate primary income adjustments for the period 2018–2024 in line with statistical guidance provided by the mission. September 2025
- H SM and BOM to prepare a joint dissemination note – explaining the revision in the disseminated data September 2025
- H Using the disaggregated data provided by the FSC, SM (in coordination with BOM) to further review the over 3000 entities in the ‘other’ category and improve the classification according to ISIC activity. December 2025
- H Trade-related and ‘other’ costs should be thoroughly investigated by SM – alongside the BOM and FSC – to remove the expenses that should not be recorded as output. September 2025
- H SM to revise the estimates of output for GBCs engaged in merchanting (2021–2024) from the sum of cost approach currently used, to the SNA-recommended (margin) approach. December 2025
- H SM to revise the methodology used to derive estimates of output (and exports) for investment funds and holding companies December 2025
- M SM and BOM to compile (separately and reconcile) investment income related to holding companies and investment funds based on the mission’s recommendations. This investment income should be appropriately included in the balance of payments and national accounts – earned income account (and allocation of earned income account) as interest and dividend income received. June 2026
- PR BOM and SM to include estimates of GBC’s reinvested earnings both debits and credits in the primary income (allocation of earned income account) and net acquisition assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates. December 2026
- M Use the classification of GBCs derived from the analysis process to classify GBCs as an ‘of which’ break out of the appropriate sectors in the institutional sector accounts. Based on preliminary assessment at least 10 percent of the GBCs would be removed from the other financial corporations sector and classified to the nonfinancial corporations sector. End-2027

*IMF | Technical Assistance Report – Mauritius National Accounts & Balance of Payments Statistics, Section I and Annexes I–II.*

### Section I. Measurement of GBCs in the National Accounts and Balance of

### Section I. Measurement of GBCs in the National Accounts and Balance of Payments

### A. Overview of the Global Business Corporations in Mauritius
- As of December 2023, more than 13,000 GBCs actively operated in Mauritius.
- Table of GBC activities and shares as reported by the Financial Services Commission (as of December 2023):
  - Investment Holding: Share (of Assets) 67.1; Number of GBCs 7,549; Share (of GBCs) 56
  - Investment Fund: Share (of Assets) 17.6; Number of GBCs 885; Share (of GBCs) 7
  - International Trading: Share (of Assets) 1.4; Number of GBCs 646; Share (of GBCs) 5
  - Fund Management: Share (of Assets) 0.4; Number of GBCs 384; Share (of GBCs) 3
  - Consultancy: Share (of Assets) 0.1; Number of GBCs 299; Share (of GBCs) 2
  - Other: Share (of Assets) 13.4; Number of GBCs 3,801; Share (of GBCs) 28
  - Total: Share (of Assets) 100; Number of GBCs 13,564; Share (of GBCs) 100
- Ownership and control:
  - Of the 13,564 active GBC license holders, approximately 30 percent are considered to be foreign-controlled (defined as more than 50 percent of equity held by the direct investor directly or indirectly).
  - 70 percent are considered domestically controlled, though majority of shares are reportedly held by nonresidents.
- Main economic linkages of GBCs to the domestic economy:
  - Banking system: deposits, loans, payments services for GBCs.
  - Direct purchases of services from domestic (non-GBC) entities, including professional services.
  - Some employment of residents.
  - Investment in resident (non-GBC) entities.
- Note: GBCs may transact with both residents and nonresidents.

### B. Statistical Treatment of GBCs in the National Accounts
- Recent incorporation:
  - Statistics Mauritius (SM) and Bank of Mauritius (BOM) recently started incorporating an estimate of output for GBCs in the national accounts and implicit exports of services in the balance of payments.
  - Last comprehensive data inclusion occurred during the 2018 national accounts revision.
- Effects of recent revisions:
  - Latest revision led to an increase in the statistical discrepancy from production and expenditure estimates of GDP.
  - Estimates of output for the ‘sector’ were revised downwards for 2021–2024.

- Published estimates of GDP by expenditure (reported by SM as at end-December 2024 — Current Prices: Millions of Mauritian Rupees):
  - 2021 GDP (E) 478,807; 2021 (R) 478,807
  - 2022 GDP (E) 571,194; 2022 (R) 570,301
  - 2023 GDP (E) 658,968; 2023 (R) 641,331
  - 2024 GDP (E) 726,642; 2024 (R) 698,537
  - Final consumption expenditure 2021 432,528; 2021 (R) 432,528; 2022 492,025; 2022 (R) 492,025; 2023 531,975; 2023 (R) 531,175; 2024 570,058; 2024 (R) 568,617
  - Gross fixed capital formation 2021 93,820; 2021 (R) 93,820; 2022 112,806; 2022 (R) 112,806; 2023 158,195; 2023 (R) 140,986; 2024 203,351; 2024 (R) 171,111
  - Change in inventories 2021 951; 2021 (R) 951; 2022 3,857; 2022 (R) 3,857; 2023 -1,304; 2023 (R) -2,173; 2024 1,450; 2024 (R) 850
  - Net Exports 2021 -45,949; 2021 (R) -73,437; 2022 -43,718; 2022 (R) -77,596; 2023 -19,639; 2023 (R) -64,054; 2024 -19,947; 2024 (R) -67,919
  - Exports 2021 211,641; 2021 (R) 184,153; 2022 316,116; 2022 (R) 282,238; 2023 347,837; 2023 (R) 303,422; 2024 359,289; 2024 (R) 322,137
    - Goods (f.o.b) 2021 81,992; 2021 (R) 81,992; 2022 105,524; 2022 (R) 105,524; 2023 103,895; 2023 (R) 103,895; 2024 104,295; 2024 (R) 110,684
    - Services 2021 129,649; 2021 (R) 102,161; 2022 210,592; 2022 (R) 176,714; 2023 243,942; 2023 (R) 199,527; 2024 254,994; 2024 (R) 211,452
      - o/w GBCs 2021 69,995; 2021 (R) 42,500; 2022 84,000; 2022 (R) 50,122; 2023 84,500; 2023 (R) 40,085; 2024 86,000; 2024 (R) 40,797
  - Imports 2021 257,590; 2021 (R) 257,590; 2022 359,834; 2022 (R) 359,834; 2023 367,476; 2023 (R) 367,476; 2024 379,236; 2024 (R) 390,056
    - Goods (f.o.b) 2021 194,313; 2021 (R) 194,313; 2022 265,404; 2022 (R) 265,404; 2023 266,789; 2023 (R) 266,789; 2024 272,957; 2024 (R) 277,582
    - Services 2021 63,277; 2021 (R) 63,277; 2022 94,430; 2022 (R) 94,430; 2023 100,287; 2023 (R) 100,687; 2024 106,279; 2024 (R) 112,474
  - Statistical discrepancies 2021 -2,544; 2021 (R) 24,945; 2022 6,224; 2022 (R) 39,209; 2023 -10; 2023 (R) 35,397; 2024 -28,270; 2024 (R) 25,879

- Source data and issues:
  - Data used to estimate the ‘GBC sector’ are taken from the ESSNAC survey administered by the FSC and completed by management companies (MCs) for all 13,000 plus GBC license holders.
  - ESSNAC results are collated at the GBC level by the FSC and then aggregated into five activity groups based on licensee’s reported activity at application: investment holding companies, investment funds, international trading companies, consultancy companies, and legal and other professional services.
  - Aggregation at application-time activity group leads to misalignment with actual activities carried out; the ‘other’ category accounts for over 28 percent of GBCs and 13 percent of assets and includes service providers with potentially differing NA treatments.
  - Notable inconsistencies and misclassification in ESSNAC responses require validation checks and reclassification (ISIC) at the disaggregated GBC level.

### C. Review of the Statistical Discrepancies and Source Data Findings
- Main drivers of discrepancies between GDP (P) and GDP (E):
  - Miscalculation of GBC output and implicit exports of services included in GDP (E).
  - Errors in survey data and misclassification of input costs leading to mismeasurement of implicit exports of services.
  - The estimation method used to compute output for the ‘sector’ (universal sum-of-costs) is inappropriate for several activity types.
- Identified data issues and actions:
  - Many items reported as “trade related services” for financial corporations are likely costs attributable to merchanting and should be reclassified.
  - SM staff corrected largest discrepancies during the mission, but further verification is required because source data are received at activity-group level and queries must be routed through FSC to MCs.
  - BOM reportedly developed a workplan to engage SM and FSC on GBC survey data following the mission.

- Mission recommendations for data validation and classification:
  - Statistics Mauritius to request ESSNAC survey results at the GBC level from the FSC for 2022–2024 and for collection periods going forward.
  - Using disaggregated data, SM (in coordination with BOM) to further review the over 3000 entities in the ‘other’ category and improve classification according to ISIC.
  - SM to conduct appropriate validation of estimates used to compile the output and exports of services for the categories identified during the mission for the 2022–2024 surveys and 2025 when available.
  - Trade-related and ‘other’ costs should be thoroughly investigated by SM alongside BOM and FSC to remove costs that should not be included in output.
  - SM to review the data provided and correct unusually large (unexplained) discrepancies identified during the mission and use revised data in estimation.

### D. Output and Implicit Export of Services: Methodology Issues and Recommendations
- Current practice:
  - SM compiles output for all GBCs (the ‘GBC sector’) using the sum of cost approach:
    - Output of the ‘GBC Sector’ = Value Added of GBCs (license fees and rates paid by GBCs to resident authorities + wages and salaries paid out by GBCs to resident employees) + intermediate consumption (recurrent expenses on goods and services paid to resident companies).
    - The output of this sector is currently being totally allocated to exports (implicit exports) on the rationale that shareholders/affiliates are consuming these services.
- Mission concerns and recommended changes:
  - The universal application of the sum-of-cost methodology is not appropriate for:
    - Merchanting corporations
    - GBCs offering consultancy services
    - Some activity types in the ‘other’ category
  - For investment funds, the SNA recommends these entities have no output or intermediate consumption — SM should revise estimates to align with international standards.
  - For holding companies, imports of services are to be included in the sum-of-cost estimates of output.
  - For merchanting, only the margin (difference between sales and purchases) is included in value added.
  - Consulting and other professional services should be estimated using the SNA-recommended approach rather than the current sum-of-cost approach.
  - Implementation requires SM to collect GBC-level data from the FSC.

### E. Merchanting: Specific Statistical Treatment Guidance
- Definition and 2025 SNA guidance:
  - Merchanting is the purchase of goods by a resident from a nonresident combined with subsequent resale of the same goods to another nonresident without the goods being physically moved in and out of the compiling economy.
  - 2025 SNA ¶ 23.13 treatment:
    - Acquisition of goods is shown as a negative export of the economy of the merchant.
    - Sale of goods is shown as a positive export.
    - The difference between sales and purchases of goods for merchanting is shown as “net exports of goods under merchanting.”
  - Output of merchanting GBCs reflects only the margin (difference between sales and purchases), which includes margins, holding gains and losses, and changes in inventories of goods under merchanting.

### F. Mission-Level Priority Recommendations (Action Plan Highlights)
- Priority recommendations with target dates and responsible institutions (selected highlights):
  - May 2025: Statistics Mauritius to request ESSNAC survey results at the GBC level from FSC for 2022–2024, and for future collection periods. — Responsible: SM to request GBC-level data from the FSC.
  - September 2025: SM to conduct appropriate validation of estimates used to compile the output, exports and imports of services for the categories identified during the mission for the 2022–2024 surveys (and 2025 once surveys available). — Responsible: SM to conduct consistency checks with the GBC Management Companies.
  - September 2025: Integrate mission’s recommendations to revise estimation of output (and implicit exports of services) for the ‘GBC sector’ and integrate revised estimates in both the national accounts and BOP. — Responsible: SM to revise estimates; validation in coordination with BOM.
  - September 2025: SM and BOM to revise and integrate primary income adjustments for the period 2018–2024 in line with statistical guidance provided by the mission. — Responsible: BOM and SM.
  - September 2025: SM and BOM to prepare a joint dissemination note explaining the revision in the disseminated data. — Responsible: BOM and SM.
  - December 2026: BOM to include estimates of GBC’s reinvested earnings both debits and credits in the primary income (allocation of earned income account) and net acquisition of assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates. — Responsible: BOM.

*Source: IMF Technical Assistance Report – Mauritius National Accounts & Balance of Payments Statistics, Section I.*

### 19. The ESSNAC survey results provide the value of the good sold under merchanting as well

### 19–29: Merchanting, GBCs, Investment Funds, and Reinvested Earnings

### Merchanting (ESSNAC survey)
- Findings:
  - The ESSNAC survey provides the value of the good sold under merchanting as well as the associated costs of selling these goods.
  - Currently, estimates related to merchanting activities are reported throughout the various activity types in the ESSNAC survey.
  - Further validation of the ESSNAC merchanting data is needed.
- Mission recommendations:
  - SM to revise the estimates of output for GBCs engaged in merchanting (2021–2024) from the sum of cost approach currently used, to the SNA-recommended approach (margin).
  - BOM to review and validate ESSNAC data via a sample survey to correctly estimate exports of goods under merchanting and include in the BOP.
  - The BOM and SM work together to ensure that the GBC goods data are of an acceptable quality and that they are not double counted in estimates of exports.

### Investment Funds and Holding Companies (2025 SNA / BPM7 guidance)
- Findings and guidance:
  - The 2025 SNA (¶7.177 – 7.179) and BPM7 (¶11.79 – 11.81, ¶12.57-59 and box 12.2) provide guidance on treatment of investment funds.
  - Fees for administrators, trustees, and portfolio managers should be treated as payments for services provided directly from the original professional providers to the shareholders; output and intermediate consumption of the investment fund itself equal zero.
  - SM currently uses the sum of cost approach to derive output for investment funds and excludes costs paid to acquire services from nonresidents and costs paid to other resident GBCs from intermediate consumption.
  - SM intends to modify methodology to include the cost of imported services in intermediate consumption (and output), with implications:
    - (i) output from investment funds would increase significantly since a large portion of the expenses of investment funds are paid to nonresidents;
    - (ii) without additional adjustments, this would result in a significant increase in implicit export of services (based on the premise that the majority of the shareholders are nonresidents).
  - For holding companies, international guidelines acknowledge output generated as professional or financial services; current practice uses sum of cost approach and for practical purposes considers fees paid to acquire services from other non-GBC resident entities.
- Mission recommendations:
  - SM to revise the methodology applied to investment funds to align with the guidance of the 2025 SNA / BPM7: output, intermediate consumption, and gross value added of investment funds would be zero; costs paid to acquire services from domestic corporations should be attributed to ‘implicit export of services’ and household final consumption expenditure based on ownership of the fund; services acquired from nonresidents are not included in (implicit) exports of services.
  - SM to revise the methodology used to derive estimates of output (and implicit exports) and imports of investment funds and holding companies.
  - Revise estimates of output for the GBC sector for 2021–2024 after implementing the mission’s recommendations.
  - The allocation of earned income account should show total investment income, the imputed dividend paid to shareholders (including costs paid to acquire services from resident and nonresident units), the actual dividend paid to shareholders, and the remaining investment income attributable to investment fund shareholders.

### Fund Managers, Professional Service Providers, and Other GBCs
- Findings:
  - SM currently uses the sum of cost approach for fund managers and professional service providers and for other GBCs in the ‘other category’.
  - Preliminary assessment suggests at least 10 percent of the GBCs would be removed from the other financial corporations sector and classified to the nonfinancial corporations sector.
- Mission recommendations:
  - SM to revise estimates for fund managers and other professional service providers to the SNA-recommended approach instead of the sum of cost approach.
  - For GBCs in the ‘other category’, SM to use disaggregated FSC data to refine classification before improving methodology.
  - For medium to long term, consider using the classification of GBCs derived from analysis to classify GBCs as an ‘of which’ break out in institutional sector accounts.

### Investment Income and Imputed Dividends Related to GBCs
- Findings:
  - BOM has an estimate of ‘imputed dividend’ for services consumed by nonresident shareholders of all GBCs; Statistics Mauritius agrees with the treatment but has not yet included this imputation in investment income.
  - Imputed dividends apply to investment funds, and to holding companies, merchanting companies, or other entities engaged in professional services.
- Mission recommendations:
  - SM and BOM to compile and reconcile investment income related to holding companies and investment funds and include it appropriately in the balance of payments and national accounts – earned income account (and allocation of earned income account) as interest and dividend income received.
  - SM and BOM to compile and reconcile imputed dividends for investment funds in the earned income account (and allocation of earned income account) of the balance of payments and national accounts.
  - SM and BOM to check actual dividends reported in the ESSNAC survey for consistency and include these in the earned income account (and allocation of earned income account) of the balance of payments and national accounts.
  - SM and BOM to compile and reconcile investment income attributable to investment fund shareholders in the balance of payments and national accounts.

### Treatment of Reinvested Earnings in the Balance of Payments
- Findings:
  - BOM currently does not include reinvested earnings of GBCs in the primary income account of the BOP (debits and credits), citing concerns on impact to current account estimates.
  - In the financial account, reinvestment of earnings of GBCs (net incurrence of liabilities) are included in equity other than reinvested earnings, while GBCs’ reinvestment of earnings (net acquisition of financial assets) are not compiled nor included.
  - The IIP equity positions include reinvested earnings on liabilities only, creating inconsistencies between BOP current account and IIP; IIP shows a surplus while current account shows a sustained deficit.
  - An adjustment is made in the Article IV Staff Report external sector assessment (ESA) for Mauritius to current account balance due to this gap.
- Mission recommendations:
  - BOM and SM to include estimates of reinvested earnings of GBCs both debits and credits in the primary income (allocation of earned income account) and net acquisition of assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates.
  - BOM to prepare a dissemination note – explaining the revisions to the BOP series.
  - If implemented, the current account balance may record a lower deficit or turn to a surplus broadly in line with the adjusted current account balance estimated in the external sector assessment.

### Inter-agency Coordination
- Findings:
  - BOM, SM, and the FSC created a Joint Working Group in 2022 to harmonize GBC treatment; the group has not been active but engaged when required.
  - Validation/consistency checks of the ESSNAC survey results for the 2022–2025 periods and revised methodology for GBCs should be priorities.
- Mission recommendations:
  - Joint Working Group on Statistics between SM, FSC, and BOM should resume quarterly coordination meeting.
  - SM and BOM to continue training the Management Companies and FSC on the ESSNAC Survey.
  - SM to resume annual training of management companies on completing the ESSNAC survey.

### Action Plan: Priority actions and target completion dates (selected items)
- PR Statistics Mauritius to receive ESSNAC survey results at the GBC level from the FSC for 2022–2024 and for collection periods going forward, May 2025
- PR SM to conduct appropriate validation of estimates used to compile the output, exports and imports of services for the categories identified during the mission for the 2022–2024 surveys; and once the 2025 surveys become available. September 2025
- PR Integrate the mission’s recommendations to revise the estimation of output (and implicit exports) for GBCs and integrate revised estimates in both the national accounts and BOP. September 2025
- H SM and BOM to revise and integrate primary income adjustments for the period 2018–2024 in line with statistical guidance provided by the mission. September 2025
- H SM and BOM to prepare a joint dissemination note – explaining the revision in the disseminated data September 2025
- H Using the disaggregated data provided by the FSC, SM (in coordination with BOM) to further review the over 3000 entities in the ‘other’ category and improve the classification according to ISIC activity. December 2025
- H Trade-related and ‘other’ costs should be thoroughly investigated by SM – alongside the BOM and FSC – to remove the expenses that should not be recorded as output. September 2025
- H SM to revise the estimates of output for GBCs engaged in merchanting (2021–2024) from the sum of cost approach currently used, to the SNA-recommended (margin) approach. December 2025
- H SM to revise the methodology used to derive estimates of output (and exports) for investment funds and holding companies December 2025
- M SM and BOM to compile (separately and reconcile) investment income related to holding companies and investment funds based on the mission’s recommendations. This investment income should be appropriately included in the balance of payments and national accounts – earned income account (and allocation of earned income account) as interest and dividend income received. June 2026
- PR BOM and SM to include estimates of GBC’s reinvested earnings both debits and credits in the primary income (allocation of earned income account) and net acquisition assets and net incurrence of liabilities in the financial account of the BOP and revise the BOP series to improve the consistency of BOP and IIP estimates. December 2026
- M Use the classification of GBCs derived from the analysis process to classify GBCs as an ‘of which’ break out of the appropriate sectors in the institutional sector accounts. Based on preliminary assessment at least 10 percent of the GBCs would be removed from the other financial corporations sector and classified to the nonfinancial corporations sector. End-2027

*IMF | Technical Assistance Report – Mauritius National Accounts & Balance of Payments Statistics*

### Annex I. Output, Implicit Exports, and Investment Income of

### Annex I. Output, Implicit Exports, and Investment Income of Investment Funds

### Guidance from the 2025 SNA and BPM7
- 2025 SNA SNA¶7.177 – 7.179 and BPM7 ¶ 11.79 – 11.81, ¶12.57-59 and box 12.2 provide guidance on the treatment of investment funds.
- Fees paid to administrators, trustees and/or portfolio managers are treated as payments for services provided directly from the original professional providers to the shareholders.
- The output and intermediate consumption of the investment fund itself is equal to zero for these services.

### Numerical example: setup
- Investment fund domiciled in Economy A (Mauritius), owned entirely by nonresidents (shareholders in Economy B).
- Fund invests in Economy C and receives interest income of 20.
- Day-to-day costs:
  - 4 for fund management services from corporations in Economy A (resident).
  - 5 for advisory services from OFCs in Economy D (nonresident).
- Fees are financed from investment income.
- Fund pays an actual dividend of 6 to shareholders and reinvests earnings of 5.

### I. Domestic Economy (Mauritius) — Entries
- Investment Fund (Economy A):
  - Debit (Expenditures):
    - Actual Dividend 6
    - Imputed Dividend 9
    - Reinvested Earnings 5
  - Credit (Revenues):
    - Investment Income 20
- Fund Manager (resident):
  - Debit (Expenditures): (none shown)
  - Credit (Revenues): Output 4; Exports of services 4
- Interpretive notes:
  - The domestic economy records:
    - Actual dividend 6 (paid by the fund).
    - Imputed dividend 9 (the cost of services acquired from resident and nonresident service providers).
    - Reinvested earnings 5.
    - Resident services acquired (fund management) shown as the economy’s output: 4.

### II. Economy of the Shareholders (Economy B) — Entries
- Debit (Expenditure):
  - Import of services 9
  - Reinvested Earnings 5
- Credit (Revenues):
  - Actual Dividend 6
  - Imputed Dividend 9
  - Reinvested Earnings 5
- Interpretive note:
  - Economy B records import of services from Economy A (Mauritius).
  - The imputed dividend 9 appears on both sides of the account, reflecting imputed dividends used to “purchase” services from Mauritius and Economy D.

### III. Economy of the Advisory Firm (Economy D) — Entries
- Debit (Expenditure): (none shown)
- Credit (Revenues):
  - Output 5
  - Exports of services 5
- Interpretive note:
  - Economy D records services sold to Economy B (the shareholders) as output and exports of services 5.

### Additional note
- The distribution of investment income by Economy C is not shown in this illustration.

*Source: Annex I. Output, Implicit Exports, and Investment Income of Investment Funds — content unit from the provided PDF.*

### Annex II. Output, Exports, Imports and Investment Income of Holding Companies

### Key distinction from investment funds
- Holding companies can generate measurable output in the form of professional or financial services.
- These services are mostly consumed by the nonresident subsidiaries/affiliates, giving rise to exports and imports of professional and financial services.
- Because the holding company’s services are consumed by subsidiaries (not shareholders), imputed dividends are not recorded.

### Numerical example: setup
- Holding company domiciled in Mauritius (Economy A) set up to invest in Economy D on behalf of parent in Economy B.
- Holding company provides management and other services to its subsidiaries.
- Day-to-day costs:
  - 4 for professional services from corporations in Economy A (resident).
  - 5 for advisory services from OFCs in Economy D (nonresident).
- Fees financed from investment income.

### I. Domestic Economy (Mauritius) — Entries
- Holding Company (Economy A):
  - Debit (Expenditures):
    - Intermediate Consumption 9
    - Actual Dividend 6
    - Reinvested Earnings 5
  - Credit (Revenues):
    - Investment Income 11
- Professional Service Provider (resident):
  - Debit (Expenditures): (none shown)
  - Credit (Revenues): Output 4
- Additional domestic entries:
  - Imports of services from Economy D 5
  - Exports of services to Economy D 9
  - Intermediate Consumption of the holding company 4
- Interpretive notes:
  - Domestic economy records:
    - Actual dividend 6 paid by the holding company.
    - Investment income 11 (net of costs to acquire services from nonresidents).
    - Reinvested earnings 5.
  - Services acquired from resident corporations shown as output of domestic service providers (and intermediate consumption of the holding company).
  - No imputed dividends recorded because the consumer of the holding company’s services is the subsidiaries.

### II. Economy of the Parent (Economy B) — Entries
- Debit (Expenditures):
  - Reinvestment of Earnings 5
- Credit (Revenues):
  - Actual Dividend 6
  - Reinvested earnings 5
- Interpretive note:
  - Economy B records investment income received from the holding company and any reinvestment of earnings back to the holding company.

### III. Economy of the Subsidiaries (Economy D) — Entries
- Subsidiary (Economy D):
  - Debit (Expenditures):
    - Intermediate Consumption 9
    - Imports from Economy A (Mauritius) 9
  - Credit (Revenues):
    - Investment Income 11
    - Reinvestment of Earnings 5
- Service Provider in D:
  - Debit (Expenditures): (none shown)
  - Credit (Revenues): Output 5; Exports to A (Mauritius) 5
- Interpretive notes:
  - Subsidiaries record imports from the holding company’s economy (totaling the cost of services) as intermediate consumption 9.
  - Exports of services provided by OFCs to the holding company are recorded (exports 5).
  - Investment income paid to the holding company 11 and reinvestment of earnings 5 are shown. 

*Source: Annex II. Output, Exports, Imports and Investment Income of Holding Companies — content unit from the provided PDF.*

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_Source: https://www.imf.org/-/media/files/publications/tar/2025/english/tarea2025087-source-pdf.pdf_