FHTA spells out national budget

ZERO import duty on vessel parts, removal of the super yacht tax, establishment of Port Denarau as a clearance port and transparency on tax use were all pluses for the tourism industry, says the Fiji Hotel and Tourism Association.

Chief executive officer Fantasha Lockington said the incentives in the 2017-2018 national budget were acknowledged and appreciated by the industry.

However, she said FHTA was disappointed that the environmental levy had gone up.

“While the association is disappointed that the environmental levy (now called the environment and climate adaptation levy — ECAL) has been increased, offsetting the decrease in service turnover tax, which is still only mainly applicable to the tourism industry, and that despite providing clear explanations on why hotel incentives are still required yet not provided for, we are really appreciative that there has been no increase in tourism specific taxes,” Ms Lockington said.

She added that status quo on taxes continued to provide a challenge for properties to compete with other destinations.

“The still applicable 25 per cent total taxes continues to provide challenges for the industry to compete in our main global source markets which are becoming increasingly price competitive.

“The association will continue to work with Government to address the 25 per cent total tax application on the tourism industry that is contributing directly to Fiji being perceived as an expensive destination.”

FHTA president Dixon Seeto said he and the board were appreciative to Government for listening to the concerns of the industry and responding pro-actively to many of the issues raised by the association.

“These include zero import duty on vessel parts, the 12.5 per cent super yacht tax removal (now replaced with the ECAL), Port Denarau now included as a clearance port which will dramatically improve the processing of incoming large yachts, concessions for MICE related products, the required transparency on the use of ECAL for the actual purpose it is levied and the formal requirement for display of STT and ECAL on receipts in the same way VAT is displayed,” he said.

“The removal of the dividend tax and income tax threshold increase to $30,000 will also significantly affect many of our members positively and directly”

In the 2017-2018 National Budget, Government allocated $33.1 million as a grant to Tourism Fiji marketing, Fiji Tourism brand review was allocated $4.7m and $18m marketing support was allocated to Fiji Airways.

Government collected $98.1m from STT in 2016-2017 and this was expected to increase to $114.8m in 2017-2018.

Departure tax generated $147.2m in 2016-2017 and $172.2m was expected this financial year.

The environmental levy collected $77.5m in 2016-2017 and the ECAL is expected to rake in $94.3m in 2017-2018.

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