Government hits back at TST delay tactics

Fiji's Finance Minister Esrom Immanuel has voiced concern over what he calls "continued delaying tactics" by the Fiji Hotel and Tourism Association (FHTA) and some tourism operators concerning the new five percent Tourism Services Tax.

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The government has engaged with the FHTA and key tourism industry stakeholders since June to discuss the introduction and implementation of the tax.

Immanuel stated that the government has been in discussions with the FHTA and key industry figures since June. He highlighted that the implementation date for the tax, initially set for July 1, was extended twice to September 1. These extensions, he explained, were granted in good faith to allow businesses time to prepare their systems, inform customers, and ensure compliance.

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The extensions were provided in good faith to allow businesses to prepare their systems, communicate with customers and ensure compliance.

Despite these efforts, Immanuel noted that some industry players, with FHTA's support, are generating negative publicity. He believes these actions risk undermining a measure intended for the broader benefit of Fiji's tourism sector and the national economy. The minister stressed that the five percent tax is crucial for supporting Fiji Airways, which he described as vital for the industry's survival and growth. Tourism is a significant contributor to Fiji's economy, accounting for about 40 percent of economic activity, generating nearly three billion dollars in foreign exchange, and supporting thousands of jobs.

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the government believes these actions risk undermining a measure that is in the broader interest of Fiji’s tourism industry and the national economy.

The government has also addressed industry concerns by targeting the tax primarily at larger tourism operators. Immanuel pointed out that the current five percent tax is considerably lower than the previous combined 16 percent turnover-based ECAL and STT. He asserted that sufficient time has been given for preparation and now expects the sector to engage constructively. While the government remains open to addressing practical issues and providing clarification, Immanuel concluded that it will no longer tolerate efforts to delay or undermine the tax.

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the five percent Tourism Services Tax was introduced as part of the government’s broader efforts to support Fiji Airways, which he says is critical to the survival and growth of the tourism industry.