Fiji continues to work towards removing itself from the European Union’s tax blacklist, primarily hindered by the Export Income Deduction (EID), an issue that has persisted since its introduction in 2012. Shiri Gounder, Fiji’s Permanent Secretary for Finance, expressed optimism about the upcoming EU review expected in the next four to six months, highlighting that significant progress has been made in compliance with international tax standards over the past two years. Improvements in tax transparency and global cooperation have been key focus areas.
During a post-budget business breakfast in Suva, Gounder remarked, “EID remains the only sort of controversial issue that’s keeping us on the blacklist,” underscoring its classification as a harmful tax practice by the EU. He also mentioned that while the EID is set for the 2025 tax year, no decision has yet been made regarding its status in 2026. The government is currently assessing the future of the EID following the anticipated EU review.
Similar sentiments were echoed by Fiji’s Deputy Prime Minister and Minister of Finance, Professor Biman Prasad, who noted that although substantial progress has been made, the EID continues to be a sticking point for EU compliance. He assured exporters that the current benefits from the EID would not be eliminated but indicated that alternative methods might be explored to provide comparable support without appearing problematic in the eyes of the EU.
Fiji’s ongoing reforms also include joining the OECD’s Base Erosion and Profit Shifting (BEPS) framework and committing to the Multilateral Convention (MEC), showcasing the government’s dedication to enhancing its financial reputation. Prasad emphasized the necessity of resolving the EID issue, stating that, “Every time we have discussions with some of our key multilateral partners, like the IMF, World Bank, and ADB, this comes out as an issue for us.”
The commitment to addressing the EID alongside reinforcing compliance with international standards reflects Fiji’s proactive approach to improving its global trade relations and economic prospects. If successful in overcoming these challenges, there is hope for increased foreign investments and a stronger economic outlook for Fiji in the future.
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