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Indo-Fiji relations poised for new high

Bilateral relations between India and Fiji are poised to reach another milestone with the recent visit of Fiji’s Attorney General and Industry & Trade Minister Aiyaz Sayed-Khaiyum to India.

He and his delegation of government officials and businesspersons attended a number of meetings with their Indian counterparts during their stay in Delhi on January 30 and 31, 2014.

India has been a long-standing friend of Fiji and its policy of non-alignment and support to Mr Bainimarama and his Government, which Suva sees as demonstration of good relations based on mutual respect and goodwill.

Genuine friends

India considers Fiji as a good window to look far into the South Pacific region and the country’s penchant for full membership of regional blocs such as the Pacific Islands Forum would receive a boost if it pursues its strategic partnership policy.

Mr Bainimarama, Mr Khaiyum and many other leaders have been regular visitors to India after they came to power on December 5, 2006 through a military coup. Since then, India has maintained a ‘business as usual’ approach despite economic sanctions imposed by most other members of the Commonwealth, notably UK, Australia and New Zealand.

During his visit to the Indian capital, Mr Khaiyum held official discussions with India’s Finance Minister Palaniyappan Chidambaram on a number of issues of mutual interest and regional importance.

Details of the talks held between the two leaders were not released but it is understood that Mr Chidambaram had reiterated his Government’s support to Fiji and the interim Government of Josaia Voreqe Bainimarama.

Double Taxation pact

Among the highlights of the meeting was endorsement of Double Taxation Avoidance Agreement (DTAA) between the two countries.

Mr Chidambaram said that the Agreement would benefit businesses and citizens of both countries and help prevent evasion of income tax.

“The Agreement will prove tax stability to the residents of India and Fiji and facilitate mutual economic cooperation. It will also stimulate the flow of investment, technology and services between India and Fiji,” he said.

He said that DTAA incorporated provisions for effective exchange of information and assistance in collection of taxes between tax authorities of the two countries including exchange of banking information.

Attractive benefits

Mr Khaiyum said that Indian investors will not be taxed in India on business profits earned in Fiji.

“DTAA will make investment in our country more attractive. Fiji is a growing economy, creating jobs for ordinary Fijians. This Agreement has the potential to boost the Fijian economy by encouraging a stronger flow of investment, technology and services between the two countries. India is one of the world’s largest and fastest growing economies and the second most populated country in the world,” he said.

Transparent rules

According to Mr Khaiyum, Indian investors can expect transparent rules regarding taxes, surety and certainty of their operations in Fiji.

“The Agreement is fair, balanced and progressive, unlike some agreements that we have with some countries. Indians have been most accommodating. DTAA spares Fijian students studying in India from paying taxes, if they choose to work whilst studying,” he said.

In terms of the Agreement, Indian tax officials will assist Fiji Revenue & Customs Authority to recover any taxes owed to Fiji by individuals or companies residing in India, he added.

DTAA provides that business profits will be taxable in the source State if the activities of an enterprise constitute a permanent establishment in the source state.

It also incorporates anti-abuse provisions to ensure that benefits of the Agreement are available only to the residents of the two countries.

Among the Fijian officials present at the meeting were FRCA Chief Executive Jitoko Tikolevu, Industry & Trade Permanent Secretary Shaheen Ali, High Commissioner Yogesh Karan, Investment Fiji Chairman Truman Bradley and Deputy Secretary Industry & Trade. Maciu Lumelume.

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