THE Fiji Tourism Action Group (TAG) has defended the introduction of the new temporary tourism services tax in the 2026-2027 national budget delivered by Minister for Finance Esrom Immanuel in Suva last week. The new tax – which levies five per cent on all hotels and tour & cruise operators with an annual turnover of $2 million or more for 12 months starting September 1, 2026 – is expected to generate around $70 million that will be ring fenced and directed to Fiji Airways to help it in its operations.
The measure has drawn criticism from the hotel industry, who believe the burden to assist the national airline in these difficult times of elevated jet fuel prices should be broadly-based and not be borne by one sector alone.
In a statement, TAG chairperson Damend Gounder said the fact that tourism is the backbone of the national economy “contributing an estimated 40 per cent of GDP and supporting an estimated 120,000 direct and indirect jobs across the country, from resort workers and tour guides to taxi drivers, market vendors and small business owners” made it imperative to protect Fiji Airways’ international connectivity when it came under threat earlier this year.
Jet fuel prices had quickly doubled in the early months of the Israeli-US war against Iran in the Middle East, affecting airlines across the world, including Fiji Airways.
“That context is why, when Fiji Airways international connectivity came under threat earlier this year, TAG acted not to protect one company, but to protect the thousands of jobs and communities that depend on Fiji remaining open, accessible and competitive to the world,” Mr Gounder said.
“Fiji Airways provides the overwhelming majority of international visitor arrivals to Fiji.
“Any material reduction in connectivity would have consequences extending far beyond the airline itself, affecting accommodation providers, tour operators, transport operators, restaurants, attractions, retailers, employees, communities and thousands of businesses that depend directly or indirectly on visitor expenditure.
“Protecting air connectivity therefore remains fundamental to protecting tourism.”
He said Fiji Airways had presented detailed information to TAG when the war escalated and aviation fuel costs had risen sharply, putting significant financial pressure on its ability to maintain full capacity.
This, he added, had informed TAG’s pre-budget presentation to Government on options to help the national airline, including a temporary tourism services tax.
“TAG fully appreciates that individual businesses will hold differing commercial views regarding the most appropriate funding mechanisms.
“Equally, TAG believes it is important that public discussion accurately reflects the collaborative process that occurred over recent months.”
He called for Fiji Airways to “publicly commit to regular reporting to Government and industry stakeholders on how the levy is being utilised, the outcomes it is achieving, and the measurable benefits it is delivering to Fiji’s tourism sector.”
TAG is the national tourism advocacy group comprising of key stakeholders from the industry and Government.
