Australian holidaymakers heading to Fiji could face higher travel costs from next month as the island nation prepares to introduce a new five per cent Tourism Services Tax on major tourism businesses.
The tax is scheduled to take effect on 1 September 2026 and will apply to qualifying hotels, tourism operators and cruise businesses with annual turnover exceeding FJ$2 million (about A$1.3 million). Fiji’s Revenue and Customs Service has confirmed the commencement date.
The new levy is part of Fiji’s 2026–27 national budget and is expected to raise about FJ$70 million (around A$44.7 million), with the revenue ring-fenced for national carrier Fiji Airways. The Government says supporting the airline is essential to maintaining the international connectivity on which Fiji’s tourism industry depends.
Fiji is a major holiday destination for Australians, with Australian Bureau of Statistics data showing almost 37,000 Australians returned from short stays in Fiji in June 2026, making the country one of Australia’s top 10 short-term overseas destinations.
The tax has sparked criticism from travel industry groups, particularly over how it could affect holidays that were booked and paid for before the levy was announced.
Australian Travel Industry Association chief executive Dean Long told news.com.au that the travellers with existing bookings could be left facing unexpected additional costs.
“The design and rollout reflect a complete lack of understanding of how the travel booking ecosystem works,” Long said, warning that travellers and travel businesses could ultimately bear the cost.
The Travel Agents’ Association of New Zealand has also called for existing bookings to be grandfathered, arguing that travellers who had already purchased holidays should not face additional charges after the fact.
The Fiji Hotel and Tourism Association has similarly opposed the measure, arguing that operators may not be able to absorb the additional cost. The association has warned that affected tourism services could face a combined 17.5 per cent burden when the new five per cent tax is added to Fiji’s existing 12.5 per cent VAT, before the country’s departure tax is considered.
The Fijian Government has rejected calls for further delays, saying the tourism industry has already been given additional time to prepare.
Finance Minister Esrom Immanuel said in a statement on Facebook that the implementation date had been postponed three times, moving from 1 July to 1 August and finally to 1 September.
He accused the Fiji Hotel and Tourism Association and some tourism operators of using “delaying tactics” and negative publicity to undermine the measure.
The Government argues that tourism contributes about 40 per cent of Fiji’s economic activity, generates almost FJ$3 billion in foreign exchange earnings and supports thousands of jobs and businesses.
It has also defended the five per cent levy by pointing to previous tax concessions and incentives provided to the tourism sector.
There is disagreement over whether the new tax will ultimately be passed on to visitors.
Fiji’s Permanent Secretary for Finance, Shiri Goundar, previously said tourism operators would absorb the levy through internal adjustments rather than increasing prices for tourists.
However, the Fiji Hotel and Tourism Association has disputed that position, saying feedback from its members indicates that most, if not all, affected operators intend to pass the additional cost on to customers because absorbing it would not be commercially sustainable.
That leaves Australian travellers with September and later Fiji holidays facing uncertainty over whether their existing bookings will attract additional charges.
The tax is currently scheduled to begin on 1 September 2026 and will apply to qualifying tourism services supplied or consumed from that date.
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