Fiji has recently been taken off the European Union’s tax blacklist after addressing previous concerns raised by the EU regarding tax transparency, fair taxation, and harmful tax practices. The issues stemmed from a 2017 audit conducted by the EU Code of Conduct. Udit Singh, chief executive officer of the Fiji Revenue and Customs Service (FRCS), stated that Fiji was initially given a 12-month period to implement necessary reforms in compliance with international tax standards, including the Base Erosion and Profit Shifting (BEPS) guidelines. However, due to a lack of action, Fiji found itself blacklisted in 2019.
Singh remarked that there was limited motivation to pursue these tax reforms at that time, leading to the unfavorable classification. The concerns from the EU primarily centered around the impacts of Fiji’s taxation practices on companies operating within the country or considering investment opportunities.
In response to this situation, the FRCS, alongside the Ministries of Finance and Trade and various stakeholders, has worked diligently over the past three to four years to enact significant legislative and policy reforms. The recent removal of Fiji from the EU blacklist signifies the effectiveness of these changes and showcases the nation’s commitment to aligning with international tax standards.
This development is expected to enhance investor confidence and open up new avenues for economic growth in Fiji, as it continues to move toward a more transparent and fair taxation system. The government’s proactive steps in addressing past deficiencies highlight a promising commitment to creating an attractive investment environment.