Finance Minister Esrom Immanuel says Government has given the tourism industry sufficient time to prepare for the introduction of the 5 percent Tourism Services Tax (TST), warning that further attempts to delay its implementation will not be accepted.
The Government has accused the Fiji Hotel and Tourism Association (FHTA) and some tourism operators of using “delaying tactics” and negative publicity to undermine the new tax.
Finance Minister Esrom Immanuel said the Government had engaged with the FHTA and key tourism stakeholders since June and had already extended the implementation date three times — from July 1 to August 1 and then to September 1.
“These extensions were provided in good faith to allow the industry sufficient time to prepare its systems, communicate with customers and ensure compliance,” Mr Immanuel said.
He said Government was concerned that some industry players, with the support of the FHTA, continued to create negative publicity around the tax.
“Government believes that these actions risk undermining and sabotaging a measure that is in the broader interest of Fiji’s tourism industry and the national economy,” he said.
Mr Immanuel said the 5 percent TST was introduced as part of broader Government efforts to support Fiji Airways, which he described as critical to the survival and growth of the tourism industry.
“Protecting Fiji Airways means protecting the connectivity on which hotels, resorts, tour operators, restaurants, transport operators, cruise services and thousands of other tourism-related businesses depend,” he said.
The Minister said tourism contributes about 40 percent of economic activity, generates nearly $3 billion in foreign exchange earnings and supports thousands of jobs and businesses.
He also defended the tax by pointing to the significant incentives the tourism industry had received over many years, including tax holidays, duty concessions and taxpayer-funded tourism marketing.
“Today, the entire tourism industry contributes only around 5 percent of the total corporate taxes collected by Government. The other 95 percent is paid by non-tourism sectors,” Mr Immanuel said.
He said the industry had a responsibility to contribute to the wider national effort when critical tourism infrastructure, including the national airline, required support.
Mr Immanuel also compared the new tax with tourism-related taxes imposed under the previous Government.
He said the tourism sector was previously subject to a combined 16 percent turnover-based tax through the 10 percent ECAL and 6 percent STT.
“The current Tourism Services Tax is 5 percent, is turnover-based and is being introduced as a temporary measure for only 12 months,” he said.
According to the Minister, the Government had deliberately designed the measure to focus on larger tourism operators so that smaller businesses would not be unnecessarily burdened.
He said Government remained willing to address practical concerns and clarify issues surrounding implementation.
“However, the tourism industry must now work constructively with Government to implement the TST rather than continue attempts to delay or undermine it,” Mr Immanuel said.
The Tourism Services Tax is scheduled to take effect on September 1, 2026.
