Gavoka defends 5% tourism tax amid industry backlash

Minister for Tourism and Civil Aviation Viliame Gavoka has defended the proposed five per cent Tourism Services Tax (TST) to financially support Fiji Airways amid heavy backlash from the tourism industry.

Mr Gavoka said the industry needed to support Fiji Airways during a period of rising costs and international aviation pressures.

Fiji Hotel and Tourism Association (FHTA) chief executive officer Fantasha Lockington had earlier publicly opposed the proposed tax that would come into effect on September 1.

She claimed the tax would affect the industry’s growth, and visitor numbers.

Mr Gavoka said Fiji Airways needed $40 million a month to meet fuel-related costs, with the new tax expected to generate about $70 million.

“Last month was the biggest month ever in tourism,” he said, referring to the 105,000 visitors recorded by the Fiji Bureau of Statistics.

Minister for Finance Esrom Immanuel said the TST was introduced as part of broader measures to support Fiji Airways.

Mr Immanuel said Government was concerned by what he described as continued delaying tactics by the FHTA and a small number of industry players.

He said Government had consulted the industry since June, and moved the implementation date three times, from July 1 to August 1 and now September 1 to allow businesses to prepare.

However, questions over the tax have emerged alongside scrutiny of Fiji Airways’ spending priorities.

A leading corporate leader has quizzed the airline’s purchase of BYD electric vehicles for its operations in March.

Fiji Airways chief executive Paul Schuraah said the vehicles were cheaper than the previous fleet.

“Let Fiji Airways run Fiji Airways,” Mr Gavoka said.

The debate now places Government and the tourism industry at a critical point, with the September 1 deadline approaching.