By Jean Paul Arouff
PORT LOUIS (Reuters) - Mauritius' Finance Minister Seetanah Lutchmeenaraidoo has asked to be relieved of his post and his position will now be taken by the prime minister, the premier told reporters on Monday.
Prime Minister Anerood Jugnauth made the announcement at his office after days of speculation in local newspapers about the fate of the finance minister, who had not returned to work for several weeks after a visit to the United States.
Some media cited health issues related to the finance minister. Others reported differences in the cabinet over plans for construction of a new "smart" city and over how to handle negotiations with India on reviewing a double taxation avoidance treaty. They did not go into details about the rival positions.
The prime minister said Lutchmeenaraidoo had been offered the position of foreign minister in a minor cabinet reshuffle, in line with his wishes.
Jugnauth did not say if Lutchmeenaraidoo had accepted.
India has long sought changes to a treaty which it says some Indian investors abuse by using Mauritius to funnel cash into India masked as foreign investment, which benefits from tax breaks. The practice has been called "round tripping".
Lutchmeenaraidoo told Reuters in an interview last year that Mauritius was clamping down on firms using "loopholes" to avoid taxes and said the island's regulator was "ensuring to the maximum that round tripping be stopped."
The offshore financial business generates a valuable source of income for Mauritius, which wants to expand its role as a financial hub. But it also draws scrutiny from regulators around the world seeking to clamp down on so-called "tax havens".
Under other cabinet changes outlined by the prime minister, Marie Joseph Noël Etienne Ghislain Sinatambou moves foreign affairs to the ministry of technology, communication and innovation.
(Reporting by Jean Paul Arrouf; Writing by Edmund Blair; Editing by George Obulutsa and Toby Chopra)