Your next island holiday is about to cost 5% more as new tourism tax hits

Planning a Pacific island holiday? You will have to fork out an extra 5 per cent for your accommodation and tours when a new tax comes in.

The Fiji Government is asking tourists, including Australians, to pay a new fee to help prop up the country's national airline, Fiji Airways, as it tackles rising jet fuel costs and recovers from the pandemic.

But in a win for travellers and an about face by the Fijian Government, the tax will no longer be charged retrospectively, meaning Aussies who have already paid their bill for a September holiday won't have another cost to pay.

The new Tourism Services Tax, announced in the Fijian 2026-2027 National Budget, will apply to accommodation, tour and cruise companies with an annual turnover of $FJ2 million ($1.25 million) or more.

These organisations will be responsible for temporarily collecting the extra 5 per cent from customers and paying it to the government.

The tax comes into effect on September 1, 2026 and will run through until August 31, 2027.

The Fiji Government initially stipulated that even if you'd already paid for your holiday, if it fell after September 1, you would have to pay the extra amount - and travel agents under the Australian Travel Industry Association (ATIA) weren't happy.

ATIA CEO Dean Long said the Fijian Government, by asking Aussies to pay the tax retrospectively, demonstrated "a fundamental misunderstanding of how the travel booking ecosystem operates".

He said travellers who had already paid their bills in full, including families with September school holiday bookings, were "being asked to pay additional costs for trips they considered settled".

"That is not how you treat people who chose Fiji in good faith," he said.

After meeting with the Fijian Government, ATIA has since confirmed that the tax won't be retrospective and will only apply for bookings on or after September 1.

"This is a commonsense outcome, and the right one. Retrospective billing was never something the industry could accept, and today's decision protects the thousands of Australian travellers who have already booked and paid for a Fiji holiday," Long says.

"We thank the Fijian Government for listening to the concerns we raised on behalf of Australian travel agents and tour operators, and for working through this issue with industry rather than against it."

"Fiji is a very popular destination for Aussies, and we typically don't see things like this deter travellers completely. The reality for everyone is that you will need to factor a small amount of your holiday budget to account for the tax," Stark says.

More than 105,000 visitors arrived in Fiji in July, the biggest month ever for the Pacific island nation. Australia was the biggest source market accounting for nearly 46,000 tourists and 43 per cent of the market share.

Fiji Airways has announced it will stop running its direct flights between Canberra and Nadi from February 5, 2027, due to "market conditions".