Deputy Prime Minister and Minister of Finance, Professor Biman Prasad said Government is working to remove the country from the European Union’s tax blacklist, with a key focus on reviewing the Export Income Deduction (EID) scheme.
Speaking at the Post Budget Breakfast organised by the Fiji Commerce and Employers Federation (FCEF), held at the Grand Pacific Hotel in Suva on Saturday, Prof Prasad said Fiji has made significant efforts to meet EU compliance requirements but continues to face challenges related to the EID, which the EU regards as a harmful tax practice.
“We want to get out of the EU blacklist,” he said.
“We’ve done everything else.
“We have impressed on EU officials and politicians about the export deduction as a concession we provide, but we are still having difficulty in getting them to understand that.”
He said the Government does not intend to remove the current benefits exporters receive under the EID, which offers tax deductions for income earned from exports.
However, to align with EU expectations, Government is considering alternative mechanisms.
“So what we are saying is we are looking at ways to keep the support, maybe in a different way, and not call it export deduction, which is what I think the issue is with the EU.”
He said any future adjustment to the scheme would aim to maintain support for exporters without violating international standards.
“We are looking at how we can find a substitute way to support our exporters which doesn’t create a situation where we are seen to be providing this tax benefit.”
Fiji is a signatory to the EU-Pacific Economic Partnership Agreement (EIPA), and Prof Prasad said Government has already amended several provisions to support trade alignment under the agreement.
The Export Income Deduction has been extended in recent years on an annual basis.
Its future beyond 2025 remains under review, with businesses seeking clarity to guide long-term planning and pricing strategies.
