Transfer pricing is therefore concerned with by Multinational Enterprises (MNEs) ability to manipulate prices either by paying too little or too much for goods and services resulting in shifting profits from one country to another.

For example, consider a Fiji manufacturer owned by a foreign parent company which pays less than market prices for the manufactured goods bought from the Fiji subsidiary company.

The result is that profit is increased overseas and reduced in Fiji.

Discuss the impact of price manipulations for our economy. (5 marks)