Fiji on the Verge of EU Tax Blacklist Exit: What’s at Stake?

Fiji is making substantial strides towards removal from the European Union’s tax blacklist, a situation hindered mainly by the Export Income Deduction (EID), which remains a contentious issue, according to Shiri Gounder, Permanent Secretary for Finance. Speaking at a recent post-budget business breakfast in Suva, Gounder noted that significant advancements in meeting EU compliance standards have been achieved over the past two years, specifically in enhancing tax transparency and global collaboration.

Gounder expressed optimism about upcoming discussions with the EU, anticipated within the next four to six months, stating, “EID remains the only sort of controversial issue that’s keeping us on the blacklist.” He emphasized the importance of this review, indicating that there is confidence in a favorable outcome that would allow Fiji to exit the blacklist, which has been seen as detrimental to the nation’s reputation, especially regarding its economic interactions with key multilateral partners like the IMF, World Bank, and ADB.

The EID, introduced in 2012, has faced scrutiny from both the EU and the World Trade Organization. While it is still applicable for the 2025 tax year, Gounder mentioned that no decision has been made yet regarding its continuation or elimination for 2026. He added that the government would evaluate the future of the EID following the upcoming EU review, hinting at potential modifications to better align with EU regulations and assist exporters.

Fiji has actively been aligning itself with international tax standards, such as committing to the OECD’s Base Erosion and Profit Shifting framework, to demonstrate its dedication to financial compliance. The ongoing reforms signal a positive commitment to improving Fiji’s global trade relationships, highlighting the possibility of increased foreign investment opportunities.

The government’s proactive approach and collaborative efforts reflect a hopeful outlook for Fiji’s economy, suggesting that with continued reforms and compliance, there may be substantial advancements in its international standing and economic prospects.