“THE tourism industry did not propose, endorse, or ‘broadly agree’ to the Government’s 5 per cent Tourism Services Tax or Service Turnover Tax.”
Fiji Hotel and Tourism Association chief executive officer Fantasha Lockington made the remarks suggesting that the tourism industry agreed to this measure was misleading.
Presenting the 2026-2027 National Budget, Minister of Finance Esrom Immanuel announced that the tourism industry had agreed to support a temporary 5 per cent Tourism Services Tax on hotels, tour and cruise operators with annual turnover exceeding $2million.
Ms Lockington said a few representatives might have expressed support in isolated discussions, and they did not represent the wider tourism industry.
“The overwhelming majority of FHTA members strongly oppose the tax in its current form, and the lack of consultation prior to its announcement,” she said.
Ms Lockington reiterated that while Fiji Airways was central to Fiji’s connectivity, visitor arrivals, trade, employment, and national brand; support for a national carrier must be funded through a national fiscal response.
“It cannot be imposed on one sector already managing COVID-era debt, rising wage costs, labour shortages, infrastructure pressures, and one that is increasingly criticised for imposing rates that simply reflect the high cost of doing business while complying with labour, tax, health, OHS, liquor, NFA and every other regulatory requirement thrown at it.
“FHTA stresses that the tax would apply regardless of profitability and would ignore margins, debt levels, seasonality, forward contracts, wholesale arrangements, or an operator’s ability to absorb additional costs.”
She said operators could not simply return to guests, agents or wholesalers to recover another 5 per cent without risking disputes, cancellations, destination and brand reputational damage or margin loss.
“Contracted rates, deposits and payments are legally binding and commercially locked in, meaning any attempt to retroactively add costs would breach agreements and undermine confidence in Fiji’s tourism product. The industry does not agree to absorb this turnover tax and indication from members suggest the majority, if not all, will pass it on in its entirety.
“By not doing so it would erode already thin margins, destabilise forward contracts, and compromise long-term viability and absorbing the 5 per cent turnover tax is neither practical nor commercially sustainable.”
