The Fiji Hotel and Tourism Association says the growing backlash over the new Tourism Services Tax in Fiji’s key visitor markets was “entirely avoidable”, claiming Government was warned months ago about problems with its implementation.
FHTA chief executive officer Fantasha Lockington said the association raised concerns as soon as the five per cent levy was announced and proposed alternatives that would provide direct support to Fiji Airways without imposing a broader tax across the tourism supply chain.
“We tried to make this work from day one, and we were ignored at every turn,” Ms Lockington said.
“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.”
FHTA said it also requested at least four weeks between the release of the Fiji Revenue and Customs Service’s Standard Interpretation Guidelines and implementation of the tax.
However, it said the guidelines were only finalised 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,” Ms Lockington said.
“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.”
The criticism comes as travel industry groups in Australia and New Zealand raise concerns about the treatment of existing bookings.
FHTA said travel agents handling multi-resort itineraries were facing difficulties because of uncertainty around collection arrangements, including the need to re-invoice wholesalers and customers for bookings settled months earlier.
Ms Lockington said Fiji’s tourism industry had invested significant time and resources into establishing the country as a credible and well-run destination.
“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.
FHTA said travel agents, wholesalers and tour operators now had little more than a week to adjust booking systems, invoicing processes and customer communications.
Ms Lockington also linked the debate to Fiji Airways’ wider financial position, noting Parliament had approved a further $200 million Government guarantee for the airline’s borrowing on August 17.
“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,” she said.
“Government had every opportunity to get this right. It chose not to take it.”
