Some of Fiji’s tax policies prior to its removal from the European Union (EU) blacklist in 2019 disproportionately favored foreign companies over local businesses, according to Udit Singh, the chief executive of Fiji Revenue and Customs Service. He pointed out that these practices created an imbalanced environment for investors in the country.
Singh noted that while quantifying the exact impact of these tax policies is challenging, evidence suggests that they did not favor local enterprises and sometimes conflicted with recognized international standards, including regulations set by the World Trade Organization (WTO). He emphasized that certain tax incentives were intended to attract international companies to establish their headquarters in Fiji, which inadvertently disadvantaged local firms.
“There was an uneven playing field for local companies versus overseas companies,” Singh remarked. He called for a more equitable taxation structure that aligns with global norms, indicating that such a level playing field should be a universal goal.
Addressing the potential effects of these past tax practices, Singh acknowledged the difficulty in estimating the specific investment losses Fiji may have encountered because of these unfair incentives. He explained that corporate investment decisions are typically determined by a variety of factors, including risk assessments, legal frameworks, and notably, the influence of the EU blacklist.
However, Singh expressed optimism that the EU blacklist no longer serves as a barrier to investment in Fiji. He pointed out that the country has established tax agreements with 150 nations, which sends a favorable message to potential investors looking to engage with Fiji’s economy. As such, the efforts to rectify past tax inequalities may enhance Fiji’s attractiveness on the global investment landscape, fostering a more balanced and fair business environment moving forward.
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