Tax Hike in Fiji

Fiji's value-added tax (VAT) is to increase from 12.5 percent to 15 percent on January 1, 2007. This comes on top of the three percent hotel turnover tax introduced earlier this year. Beginning next year, everything sold at a hotel in Fiji, including rooms, meals, drinks, and activities, will be taxed at the rate of 18 percent. Most items purchased in local stores and meals at non-hotel restaurants will be subject to 15 percent tax. Expect almost all prices in Fiji to go up 2.5 percent on January 1st.

Most budget hotels, non-hotel restaurants catering to the local population, and virtually all shops include the VAT in their quoted or sticker prices. However, upscale hotels and resorts and many hotel or tourist restaurants often do not. Visitors to Fiji should be very careful to check whether VAT is included in the quoted price of their accommodations, or get an 18 percent shock on check-out.

UPDATE: On December 12, 2006, Fiji's military government announced that the 2.5 percent VAT increase was being scrapped. VAT will remain at 12.5 percent, as it has been for several years.

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