No tax favours for Fiji’s tourism
A report in Fijilive says that Fiji’s tourism industry should not receive preferential tax treatment but should receive some money for advertising the country as a tourist destination, academic Professor Ron Duncan says.
With the 2008 National Budget to be announced on November 23, Professor Duncan has also recommended that discriminatory taxes on tourism, such as the turnover tax, and the tariffs imposed by the deposed Qarase Government on foodstuffs mainly consumed by tourists, should be removed.
“The main export for Fiji is tourism, so the government can help this sector by removing the discriminatory taxes imposed on it,” Professor Duncan, the executive director, Pacific Institute of Advanced Studies in Development and Governance at the University of the South Pacific in Suva said.
Duncan said there is a case for the government to provide some money for advertising Fiji as a tourist destination.
“Advertising is a public good that benefits all and will be under funded if left solely to the private sector,”
Professor Duncan says the increased tariffs imposed on the tourist sector by the (deposed) Qarase Government and maintained by the interim Government are based on the mistaken belief that most of the tourism income goes overseas.
“In fact, around 60 per cent is retained within the economy.”
“Imposing the 27 per cent tariff on most foods consumed by tourists, taxes Fiji’s main economic activity and foreign exchange earner.”
“As well, it raises the prices of all foods that compete with imported foods.”
Duncan says most people do not understand this, which is the reason that there has been such surprise that food prices have risen so much this year.
Tourism, Fiji’s main foreign exchange earner has suffered badly after the December 5 military coup, as neighbouring countries, Australia and New Zealand, the country’s major tourism markets issued strong travel advisories to their citizens traveling to the country.
With visitor arrivals steadily declining, tourism promotional body, the Fiji Visitors Bureau sought more funding from the interim government to market the country abroad.
After lobbying for much of the year, the interim Government finally released $2m last month which the FIVB says will now be used for marketing in the first quarter of next year.
Tourism industry stakeholders insist that investing in tourism is the fastest way to turn Fiji’s economy around.
Hotel capacity in Fiji is at an estimate 40 per cent for the last quarter. The FIVB says there are many more hotel rooms to fill now. In 2006, there were 8748 hotel rooms to fill, but this has now increased by 7.5 per cent in available rooms to 9403.
The FIVB is also seeking a budgetary allocation of $20m in the 2008 national budget to reactivate its marketing plans to revive the tourism industry.
As far as other export sectors are concerned, Professor Duncan says a major issue is not to inhibit foreign trade or foreign investment in any way, as these are major ways by which new ideas enter the country.
A report by The Mole from Fijilive
John Alwyn-Jones
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