Abstract
The paper considers the development of the unique fiscal relationship that exists between the government of Fiji and Emperor gold mines. Over a period of 40 years Emperor has not only paid negligible amounts of taxes and royalties it has frequently been directly subsidised by the state. In 1983 the government signed the Vatukoula tax agreement which effectively gave new mines a tax holiday for over 20 years. At the time of writing, Emperor regularly declares a dividend, is profitable in comparison to similar mines and pays no corporate taxes. The tax agreement stands as unique among developing countries in terms of allowing all potential rents from the mine to pass directly to the mine owners and almost nothing to the resource owner.
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