Tourism operators disagree over hotel turnover tax levy

No surprises here as tourism operators with especially close ties to the illegal and military regime turn on each other when it comes to reduced profit margins.

It's a dog eat dog world and Budget Day draweth nigh.

Turnover tax unrealistic: FRCAElenoa Baselala
Friday, November 11, 2011 

IT has taken the Fiji Rental Car Association by surprise. 

The comments by re-elected president of the Fiji Islands Hotel Association Dixon Seeto for a level playing field has drawn pictures of unlevelled roads from the FRCA. 

"We have read with total surprise that Mr Seeto proposes that all tourism related activity be levied a hotel turnover tax," FRCA president Bob Niranjan said. 

"He mentioned rental cars and tour companies, but failed to mention taxi operators, clothing manufacturers (these rely heavily on merchandise sold in boutiques in hotels) and handicraft outlets, plus a host of other industries that rely on tourist arrivals. 

"Mr Seeto's comments "a level playing field" but in our industry we have very high road levy, heavy maintenance costs because of poor road conditions, plus we pay full duty on vehicles and spare parts, whereas the hotel industry gets duty concessions and gets more support through Tourism Fiji, than we do as tourist related industries". 

Mr Niranjan said rental cars used and contributed substantially to road related costs relevant to vehicles, including full import duties, road levy costs, registration costs, rental permit costs as well as high maintenance costs because of road conditions. 

In the rental car business, tourists would amount to possibly 30 per cent average across the entire rental industry, while 70 per cent of clients include local individuals and corporate organisations, he added. 

"Would a level playing field for road upgrade costs include a road levy imposed on hotels, as its relies on good roads to bring tourists to resorts, is a question to be considered by Mr Seeto. 

"The Fiji Islands Hotel Association is supporting a call by the industry for greater marketing funds but listening to Tourism Fiji, who are confident that we will surpass the one billion dollar mark this year, would imply no need to bring in extra taxes especially as many small businesses are just recovering from soft economic conditions locally. 

"Fiji is still seen as an expensive destination even with the low exchange rate when it comes to rental cars, because of the factors mentioned above. 

Many rental car operators struggle to operate at a profit and the FRCA feels it would be inappropriate to rope rental car operators who get no concession whatsoever although they provide a valuable service to our visitors," Mr Niranjan said.