Fiji’s new 5% tourism services tax will hurt tourism operators and ultimately visitors, the Australian Travel Industry Association (ATIA) says.
And it is meeting with Fiji government representatives to discuss the temporary tax.
The Fijian government announced that for 12 months, starting on September 1, 2026, a 5% tax will be passed onto Fiji Airways.
The tax was passed by the Fijian parliament on July 17 and applies to hotel, tour and water sports operators.
Fiji’s Tourism Action Group (TAG has defended the tax, arguing it is necessary to protect its airline and tourism sector; click here for more on that.
(Fiji’s parliament has approved a F$200m or A$126m guarantee for the airline for three years as the airline eyes a return to profit next year.)
A lack of notice and retrospective nature of the tax has upset ATIA, says chief executive officer Dean Long
“The design and rollout reflects a complete lack of understanding of how the travel booking ecosystem works,” he says.
“It is travellers and travel businesses who will pay the price for that failure.”
FIJI’S MOVE ‘A NO-GO’
On the retrospective application of the tax on tourism operators with an annual turnover of more than F$2 (A$1.26) million, he calls it “an absolute no-go”.
“Once a customer has paid, that price is locked in. Sending a fresh bill after the fact is not tax collection, it is a broken promise dressed up as policy.”
Long says that ultimately it will be the traveller who pays.
“Travellers are the ones left exposed,” he says.
“Families with September school holiday bookings already paid in full and travellers on large group, corporate and film production bookings, are being asked to find extra money for a holiday they thought was settled months ago.
“That is not how you treat people who chose Fiji in good faith.”
He says travel agents and tour operators have been “caught in the middle” between tax and traveller.
“They are being asked to explain and administer a cost they did not create, could not have anticipated and have no control over while basic practicalities such as who collects the tax, how it applies to net rates and existing contracts, and where a “supplier” ends and an “agent” begins, remain unclear even for new bookings.”
Long says the current predicament is pointless.
“None of this needed to happen,” he says.
“The tax arrived with zero consultation with the travel industry in Australia or New Zealand despite the significant importance of these markets to Fiji.”
He points out that Australia is Fiji’s largest tourism market and New Zealand its second-largest market.
“Even setting aside the retrospective billing, the industry was given just over two weeks between the announcement and the tax’s start date, nowhere near enough time to update contracts, pricing systems or advise travellers,” he says.
The move was reportedly welcomed by Fiji’s airline but denounced by local hotel and tour operators.
- ATIA is the peak body for Australia’s $70.6 billion travel industry, representing most Australian travel agents, corporate agents, tour operators, wholesalers, and ITOs.
