Fiji Reverses Retrospective Tourism Tax After Industry Pressure

The Government of Fiji reversed the retrospective application of its new 5 percent Tourism Services Tax (TST), announcing the levy will only apply to bookings made on or after September 1, 2026. The tax targets hotels, tour, and cruise operators with annual turnovers exceeding FJ$2 million and is intended to raise approximately $70 million to support Fiji Airways amid rising global aviation fuel costs.

The decision follows intense pressure from the Fiji Hotel and Tourism Association, the Australian Travel Industry Association (ATIA), and the Travel Agents' Association of New Zealand (TAANZ). These groups argued that retrospective billing would create administrative chaos and financial uncertainty for travelers who had already paid for their trips. The revised policy ensures that tourists who booked before the September 1 deadline are exempt, regardless of their travel date.

While the Fiji Revenue and Customs Service stated the tax is set for a 12-month period ending August 31, 2027, the Fiji Hotel and Tourism Association noted that the legislation does not explicitly state an end date. Industry leaders welcomed the clarification but expressed concerns that the tax could hinder growth or discourage smaller operators from expanding beyond the turnover threshold. Separately, Fiji Airways announced it will terminate direct flights between Canberra and Nadi starting February 5, 2027, citing market conditions.