Second Schedule, Part III, Subparagraph (d) of paragraph 3 of the Income Tax Act stipulates the legal contract between the depositor and The Tax Department to the effect that the interests payable on «a deposit made and maintained for a continuous period of not less than three years» shall be exempt from tax. That legal contract cannot be put an end to by one party and can in no way be defeated.

This has now been deleted in the Finance Act.

From information received, the Mauritius Revenue Authority has asked bankers not to take this legal contract into consideration but to deduct at source 15 % on those deposits.

My impression is that by virtue of the Income Tax Act, all those who have deposited and maintained their moneys in a bank, prior to the amendment made after 1st July, 2006 for a period of not less than 36 months are not subject to the 15 % deduction at source on the interests payable thereon.

I will appreciate, if in case of transparency and a clear reading of the law, your Excellency will consider whether the Mauritius Revenue Authority will not be contravening against this legal aspect, and subject to recovery and damages.

<B>Gorah PEERMAMODE</B>