THE confusion and backlash now erupting across Fiji’s key tourist source markets as a result of the 5 per cent Tourism Services Tax (TST) was avoidable and was flagged to the Government in detail months before the controversial tax was gazetted.
The FHTA had continuously raised concerns since the announcement of the levy, and had also proposed simpler and less disruptive ways to support Fiji Airways directly rather than a blunt tax bolted onto the wider tourism supply chain.
According to the FHTA, the Australian Travel Industry Association had called the tax’s retrospective application to existing bookings “an absolute no-go”, and accused Fiji of a fundamental misunderstanding of how the travel booking ecosystem, worked.
“We tried to make this work from day one and we were ignored at every turn,” FHTA chief executive officer Fantasha Lockington said in a statement.
“We asked that pre-booked and paid holidays be exempted, the same treatment given under the old Service Turnover Tax. We asked for clarity on the sunset clause. Both requests were left out of the final Gazette, without explanation.”
She said they had also asked for a minimum of four weeks between the release of the Fiji Revenue and Customs Service’s Standard Interpretation Guidelines and the tax’s implementation date, given how much narrower the TST’s scope was compared with the STT it replaced.
“The guidelines were not finalised until yesterday, 10 days before the tax takes effect on September 1.
“We handed government a clear, specific warning of exactly how complicated this was going to be to administer.
“That warning was not heard, or it was heard and dismissed.
“Either way, the result is the mess our travel partners are now scrambling to clean up, with days rather than weeks to do it.”
Ms Lockington said agents managing multi-resort itineraries had described a process with no consistent collection method, forcing them to re-invoice wholesalers, re-invoice clients, and reconcile bookings that were settled months ago.
She said New Zealand agents had raised the same alarm at the Fiji roadshow events in Christchurch last week.
“Tourism Fiji and this industry have spent years and a great deal of money building Fiji’s name as a credible, well-run destination in markets with no shortage of alternatives.
“That reputation is being damaged this week, not because of the tax itself, but because Government would not listen when we told them exactly how to avoid this outcome.”
She said with the guidelines only finalised last week, travel agents, wholesalers and tour operators now had a little over a week to overhaul booking systems, invoicing processes and client communications before the tax takes effect.
“Our industry is not against Fiji investing in its own aviation sector.
“What we needed was consultation, time and clarity, and we asked for all three, repeatedly, well before this became a crisis.”
