ATIA: Fiji has got its services tax wrong
The organisation says the tax demonstrates a fundamental misunderstanding of how the travel booking ecosystem operates.
The Australian Travel Industry Association (ATIA) has criticised the Fijian Government’s new Tourism Services Tax, arguing it demonstrates a fundamental misunderstanding of how the travel booking ecosystem operates.
The tax is being applied retrospectively, meaning travellers who have already paid in full — including families with school holiday bookings and large group or corporate travellers — are being asked to pay additional costs for trips they considered settled.
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Travel agents and tour operators are being left to administer and explain a tax they had no part in creating, while key practical questions about collection, net rates, existing contracts, and the distinction between suppliers and agents remain unresolved.
The Fijian Government conducted no consultation with the Australian or New Zealand travel industries prior to announcing the tax, despite Australia and New Zealand being Fiji’s two largest tourism markets. Industry was given just over two weeks between the tax’s announcement and its start date — far too little time to update contracts, pricing systems, or properly inform travellers — and ATIA is currently in talks with the Fijian Government over the matter.
ATIA CEO Dean Long said: “The design and roll out reflect a complete lack of understanding of how the travel booking ecosystem works, and it is travellers and travel businesses who will pay the price for that failure.”
“Retrospective application is 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.”
“Travellers are the ones left exposed. 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.”
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“Travel agents and tour operators are stuck in the middle. 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.”
“None of this needed to happen. The tax arrived with zero consultation with the travel industry in Australia or New Zealand despite the significant importance of these markets to Fiji. Australia is Fiji’s largest tourism market, and New Zealand its second-largest. 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.”
ATIA is meeting with the Fijian Government and will update members and media as the situation develops.
