Taxing The Tourists

From a Suva correspondent

Fiji derived an estimated $46.3 mil lion in foreign exchange from tourism in 1973 but is nevertheless seeking further rewards from the so-called “visitor satisfaction industry”.

Latest measure for capturing the tourist dollar is the imposition of a three per cent service, or turnover, tax on hotels and guest houses. The tax came into force on June 1, without any real notice or detailed informa tion. There was confusion as to how the tax would be levied, and hotel keepers say there are still numbers of anomalies.

The tax is three per cent of the hotels’ monthly turnover, and is added to the customer’s bill. Anything he puts on his bill is taxed, including the drinks he signs for. If, however, he pays cash for drinks in the bar, he avoids tax, although he won’t be able to avoid it by paying cash for his drinks in the restaurant.

The tax is expected to yield some where in the vicinity of $500,000 in the first year—not all of it from visitors. Locals have to pay if they eat in hotel restaurants or stay in any hotel or guest house which has not been exempted.

Exemptions are hotels or guests houses with under 10 rooms; those charging $5 or less per person per day; and those whose business does not exceed $25,000 per year. A room containing more than three beds is

counted as being two rooms.

Under this new tax a charge o $22 —$23.69 will attract 70 cents taj and a charge of from $32 —$53.6 will attract $1.60.

Hotels aren’t happy at having t become collecting agents for th government, especially as if they fa to collect it from the visitor they wi still have to pay it. Managemeni point out that no allowances ha\ been made for package tours, whei payment has already been made ove seas for an all-inclusive tour. If tt tour operators refuse to pay the exti on tours already finalised then there nothing the hotels can do about it.

The hotels will expend extra tin and money on the new mathematii and the paperwork required.

Even charities aren’t exempt, recent bingo night at a Suva hot for the Crippled Children’s Socie had tax added.

The industry is concerned that tl tax will be regarded overseas i further evidence that Fiji is no long' an inexpensive destination. Selling F is already becoming an increasing tougher proposition, and visitor fee back says that service is not cor mensurate with higher charges.^ Western Samoa is also planning introduce a tourist tax —a 10 per ce surcharge on hotel accounts, beginnii next January. It has yet to be a proved by parliament.