Permanent Secretary for Finance, Shiri Goundar says the new 5 percent tourism services tax has been introduced following consultations with the Tourism Action Group, which includes executives from the Fiji Hotel and Tourism Association, representatives of hoteliers, Fiji Airways and Government officials.
Goundar says the meeting was held at the Ministry, where stakeholders discussed measures to support Fiji Airways and protect the tourism industry.
He says Fiji Airways plays a critical role in the tourism sector and the wider economy.
The Permanent Secretary for Finance says the airline's fuel costs increased by more than $40 million per month after global aviation fuel prices doubled, with its annual fuel bill previously standing at around $500 million.
According to the Ministry, Fiji Airways faced two options, increasing airfares or reducing flights by about 15 percent.
The Ministry says either option would have significantly reduced visitor arrivals and negatively impacted hotels, tourism operators, the economy and thousands of jobs.
They say to help the airline, the Government has introduced a temporary 5 percent tax on the turnover of hotels, tour operators and cruise operators with an annual turnover of more than $2 million.
The tax will apply for 12 months from September 1st 2026, with all revenue ringfenced to support Fiji Airways.
The Ministry adds the measures are aimed at protecting the tourism industry, which contributes about 40 percent of Fiji's economy, generates almost $3 billion in foreign exchange earnings.
This is after the Fiji Hotel and Tourism Association says the tourism industry did not propose, endorse or broadly agree to the Government's proposed 5 percent Tourism Services Tax or Service Turnover Tax.
Association Chief Executive Officer Fantasha Lockington says any suggestion that the tourism industry supported the measure is misleading, stressing that while a few representatives may have expressed support during isolated discussions, they do not represent the wider industry.
