The Fiji Hotel and Tourism Association says Government’s response to concerns over the Tourism Services Tax (TST) has missed the main issue facing the tourism industry.

In a statement, the FHTA says it is not calling for the five percent tax to be scrapped, but wants Government to exempt visitors who booked and paid for their Fiji holidays before the tax was announced.

The Association says assurances were given during consultations that existing bookings would be protected, but that position was later changed in the final legislation and guidance.

FHTA Chief Executive Officer Fantasha Lockington says this is unfair to visitors who made their travel arrangements months in advance.

She says a family from Australia or New Zealand could have booked and paid for a Fiji holiday eight months ago, based on the rules that existed at the time, only to face an unexpected additional charge when they arrive.

FHTA says the issue is now having a direct impact on bookings.

The Association says at least one multi-room group booking has already cancelled and rebooked in another destination because of the additional charge.

Lockington says this could also undermine the very objective of the tax, which is to support Fiji Airways.

FHTA says every cancelled booking represents passengers who would have otherwise travelled to Fiji, potentially on Fiji Airways.

The Association also rejects Government’s argument that tourism contributes only around five percent of corporate tax collected nationally.

FHTA says corporate tax is based on profits and does not reflect the industry’s overall contribution to the economy.

It points instead to tourism generating around 40 percent of Fiji’s economic activity and nearly three billion dollars in foreign exchange earnings annually.

FHTA says its position is straightforward, it supports Government’s efforts to support Fiji Airways, but wants Government to honour the assurance given during consultations and protect bookings made before the TST was announced.

The Association says changing the rules after visitors have already committed to their holidays risks damaging consumer confidence and Fiji’s reputation as a tourism destination.