The European Union Council has reaffirmed its ongoing scrutiny of Fiji, maintaining the country on its list of non-cooperative jurisdictions for tax purposes due to persistent compliance issues with international tax governance. Fiji is among 11 jurisdictions still facing such scrutiny, as highlighted in the Council’s recent statement.
While the EU has acknowledged “positive developments” in various jurisdictions, it emphasized that these have yet to meet the required standards of cooperation on tax matters. Members of the Council urged the remaining jurisdictions, including Fiji, to bolster their legal frameworks to address identified issues, underscoring the urgency for improvement.
Fiji’s continued presence on the blacklist stems primarily from its failure to sign and ratify the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Additionally, the EU has pointed out that Fiji maintains harmful preferential tax regimes, particularly the Information Communication Technology (ICT) Incentive and the Exporting Companies Incentive, which have not been adequately resolved.
The EU’s list, initially created in December 2017, is part of a broader strategy to promote good tax governance globally. The identification of such jurisdictions aims to enhance tax transparency and fairness, fostering adherence to international standards.
Fiji has been actively working to rectify its status since it was first placed on the blacklist, particularly following a series of compliance challenges highlighted in prior years. Government officials, including those from the Fiji Revenue and Customs Service, have expressed optimism about the country’s ongoing reforms. Significant steps have already been taken to address these issues, with a focus on improving financial systems and enhancing tax transparency.
The Export Income Deduction (EID) remains a contentious issue in Fiji’s compliance efforts, with ongoing discussions aimed at assessing its future after an upcoming review scheduled in the next few months. Authorities believe that addressing the EID could pave the way for the country’s removal from the blacklist, potentially unlocking significant foreign investment opportunities and strengthening ties with the EU.
Despite the challenges, the determination and adaptive strategies adopted by Fiji showcase a commitment to aligning with international standards. With continued support from international partners and a proactive approach, there is a hopeful outlook for Fiji’s economic landscape, suggesting that successful reforms could foster enhanced global trade relationships moving forward.