Starting next month, the Fijian government is set to implement a fresh tourism services tax targeting major tourism businesses, a move that industry experts caution may lead to higher costs for travelers.
Effective September 1st, a new 5% tax will be in place, drawing criticism from travel associations across Fiji, Australia, and New Zealand who argue they were left out of the consultation process.
The Australian Travel Industry Association (ATIA) has expressed concern that this measure might unfairly impact travelers with plans to visit Fiji from September onwards, as there is uncertainty among travel agents and operators on how to implement the tax.
Dean Long, CEO of ATIA, remarked, “The poorly planned execution shows a lack of insight into the complexities of travel booking systems, and it is both travelers and tourism businesses that will bear the brunt of this oversight.”
“Holidaymakers are left in a difficult spot. Families who booked their September school break well in advance and paid in full, along with groups traveling for business or film shootings, now face unexpected additional charges. This is not a fair treatment of those who opted for Fiji with trust in mind.”
The change forms part of wider taxation amendments enacted as part of Fiji’s 2026-2027 national budget, passed last month.
It will affect tourism operators — including hotel, tourism and cruise businesses — with an annual turnover above FJ$2 million (approximately $1.3 million).
According to Fijian finance minister Esrom Immanuel, revenue from the tax will be used to support Fiji Airways.
“The revenue generated will be ring-fenced and fully directed to Fiji Airways, which continues to face financial pressure from rising aviation fuel costs and its ongoing recovery from losses incurred during the COVID-19 pandemic,” Immanuel told local media in June.
It’s reported that the tourism tax will generate around FJ$70 million ($44.7 million) for the airline. The Fijian government is the largest shareholder of Fiji Airways.
Consultation with Fijian government
ATIA confirmed it will meet with the Fijian government to discuss the tourism services tax, which it said arrived with “zero consultation”.
Long said there is ongoing confusion over how the tax is collected, saying that members of the travel industry in Australia and New Zealand — which represent Fiji’s largest tourism markets — were not consulted on the change.
“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,” he said.
ATIA said there are still questions about how net rates (base prices which exclude discounts, commissions or fees) will be taxed, while the distinction between suppliers and agents remains “unresolved”.
The Travel Agents’ Association of New Zealand (TAANZ) said it was concerned with the way the tax is being implemented, and proposed that existing bookings be grandfathered.
“Grandfathering existing bookings is the fairest outcome. It protects travellers who purchased in good faith, gives the travel industry certainty and allows the new tax to be implemented cleanly for new bookings from 1 September,” TAANZ CEO Julie White said.
SBS News has contacted the Fijian government’s Ministry of Tourism for comment.
According to the Australian Bureau of Statistics, Fiji was one of the top 10 short-term return destinations for Australian travellers in June 2026.
Almost 37,000 Australians returned from short stays (less than one year) in Fiji in June this year. That’s compared to around 35,000 visitors in June 2025.
In a statement issued in June, the Fiji Hotel and Tourism Association (FHTA) said the tourism industry did not propose, endorse or “broadly agree” to the tax.
FHTA CEO Fantasha Lockington added that retroactively adding costs would “undermine confidence in Fiji’s tourism product”.
“Operators cannot simply return to guests, agents or wholesalers to recover another 5 per cent without risking disputes, cancellations, destination and brand reputational damage or margin loss,” she said, adding that industry operators do not agree to absorb the tax.
“Indications from members suggest the majority, if not all, will pass it on in its entirety,” she said.
Lockington noted that Fiji Airways remains vital to the country’s connectivity, visitor arrivals, trade and employment. However, she believes the carrier should be funded through a “national fiscal response”, not a tax imposed on the travel sector.
In July, Immanuel told Fijian broadcaster FBC News he was “surprised” by FHTA’s statement and claimed the proposal had received support during discussions before the budget.