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Investment Fiji Suggests Alternatives

Investment Fiji believes additional value add services could be promoted and encouraged to entice tourists to increase their spend in Fiji rather than imposing an additional tax. This was Investment
05 May 2015 09:16
Investment Fiji Suggests Alternatives

Investment Fiji believes additional value add services could be promoted and encouraged to entice tourists to increase their spend in Fiji rather than imposing an additional tax.

This was Investment Fiji’s reaction in response to the a petition by SODELPA Parliamentarian Viliame Gavoka to introduce a Service Fee for tourists.

The Service Fee is proposed to be charged to all guests/client bills for the purposes of supplementing the incomes of tourism industry workers in Fiji.

Investment Fiji chief executive, Godo Muller-Tuet, told the Parliamentary Standing Committee on Economic Affairs the Investment Fiji did not support this notion.

Mr Muller-Tuet said the introduction of this will adversely impact the affordability of Fiji as a tourist destination.

“And therefore decrease visitor numbers, which could lead to reduced investments in tourism and decreased future employment in the sector,” he said.

Investment Fiji believes all workers need to be treated fairly and their welfare is of paramount important.

“The introduction of Service Fees in the tourism industry might lead to wage inequality when compared to other sectors,” Mr Muller-Tuet said.

“It is the role of Investment Fiji to attract foreign investment and stimulate exports.

“The introduction of Service Fees could have an adverse effect on investment, as visitor numbers might be contracting rather than expanding.

“Potential investors might therefore decide not to invest in Fiji, which will have a negative impact on new employment.”

He said on the other hand, growth in tourism will lead to increased investments, new employment opportunities and increased wealth for our nation.

 

Quality of service

Meanwhile, Investment Fiji also believes this would adversely impact the affordability of Fiji as a tourist destination.

“Increased costs will make a holiday in Fiji more expansive and therefore open the door to alternative destinations,” Mr Muller-Tuet said.

“Fiji has a 20 per cent tax (five per cent Service Turnover Tax and 15 per cent VAT), in addition to the $200 Airport Departure Tax.

“This already makes Fiji an expensive destination especially for Australian visitors who have alternative options.

“Rewarding employees for good service via tips is common across the world. The introduction of a fixed Service Fee would potentially curtail this practice.

“Employees would therefore be less likely to receive tips and become demotivated. In addition, the potential loss of tips may not be compensated by the additional income derived via Service Fees.”

The Service Fee is proposed to be levied on clients/guests of:

– Hotels
– Rental car operators
– Inbound tour operators
– Recreation
– Entertainment
– Cinema
– Eateries
– Bars and nighclubs located within an area recognised as an ‘integrated tourism enclave’
– Event management operators
– All water sports
– Underwater activities
– Skydiving
– Hot air balloon rises
– River safaris
– Charter flight services

Feedback: rachael.nath@fijisun.com.fj

 




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