Fiji’s Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, announced that the government is actively working to remove Fiji from the European Union’s tax blacklist, focusing on a review of the Export Income Deduction (EID) scheme. During a Post Budget Breakfast event hosted by the Fiji Commerce and Employers Federation at the Grand Pacific Hotel in Suva, Prasad highlighted the challenges faced by Fiji in meeting the EU’s compliance requirements regarding the EID, which the EU has classified as a harmful tax practice.
“We want to get out of the EU blacklist,” Prasad stated, emphasizing that while the government has made significant progress in other areas, the export deduction remains a sticking point with EU officials. He assured that the current benefits provided to exporters through the EID, which grants tax deductions on export income, would not be abolished. However, he suggested that alternative mechanisms will be considered to align with EU expectations, possibly by reformulating how the support is labeled.
The government plans to adjust the scheme to maintain support for exporters without violating international standards. Prasad expressed a commitment to finding solutions that do not present tax benefits in the eyes of the EU.
Fiji, as a signatory to the EU-Pacific Economic Partnership Agreement (EIPA), has already made several amendments to improve trade alignment. The future of the EID, which has been extended annually, is currently under review, pushing businesses to seek clarity for their long-term planning and pricing strategies.
This ongoing effort reflects Fiji’s dedication to improving its financial reputation and adhering to international standards. If successful, these initiatives may pave the way for enhanced foreign investment and economic growth, fostering a positive outlook for the nation’s trade relations with European countries.
In line with previous articles on Fiji’s efforts to address its compliance issues, the government’s proactive measures, including enhancing transparency and engaging with international partners, highlight a commitment to resolving the classification challenges that have impacted trade and investment opportunities. By continuing to work towards compliance and fostering dialogue with the EU, Fiji is hopeful for future improvements that could unlock new avenues for economic resilience and growth.
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