Fiji's tourism sector welcomes tourism tax clarification

Fiji's tourism sector welcomes the government's decision to relax its new tourism tax, though it remains unclear about certain aspects of the policy. The 5 percent Tourism Services Tax (TST) was announced during the 2026-2027 National Budget in late June and was set to begin on 1 September. However, the government only clarified the implementation details during a parliamentary sitting in late August.

Initially, the tax was intended to support Fiji Airways and sparked concerns from global travel industry stakeholders. Following significant backlash, the government announced the tax would only apply to new bookings on or after 1 September, with no impact on pre-September bookings. The Fijian Hotel and Tourism Association (FHTA) chief executive, Fantasha Lockington, welcomed the clarification, stating that the outcome was what they had hoped for after discussions with tax and finance ministries.

The sector contributes around 40 percent of Fiji's GDP, with Australian and New Zealand tourists making up nearly 70 percent of visitors in 2025. While the new tax may impact sustaining growth, Lockington emphasized the industry's need to work harder to maintain Fiji's attractiveness. Only a few small or medium businesses would meet the TST threshold, but those near the limit might reconsider expansion.

The FHTA believes the tax will conclude on 31 August 2027, though the legislation only explicitly states a 12-month period.