High Taxes And Levies May Slow Down The Tourism Sector Recovery

By Soko Directory Team / September 14, 2020 | 2:34 pm




Tourism and hospitality stakeholders have urged the government to scale down taxes and levies in the tourism industry so as to attract more domestic visitors and recreate jobs for the youth. They argue that the industry risks extreme revenue drop unless taxes and levies at the national and county levels are harmonized.

Industry players say that levies introduced by counties coupled with already existing statutory taxes are pushing up the cost of tourism products.

“The government needs to reduce too much burden on the hospitality and tourism sector. Kenya risks losing business if prices offered are way above our neighboring competitors for instance Tanzania, Rwanda, South Africa, and other countries,” said Hasnain Noorani, Kenya Coast Working Group Chair and Managing Director for PrideInn hotels.

Currently, tourism establishments are paying the statutory 14 percent Value Added Tax and an extra two percent tourism levy to Tourism Fund. They also pay for business permits, National Environment Management Authority permits, liquor licenses at the county level, health, and advertising among other permits.

“Despite many levies being long-standing in nature, there has been a general increase in the number and scope of tourism-related taxes, fees, and charges over the last couple of years. The higher taxes make Kenya as a destination too expensive,” said Victor Shitakha, Chairman of the Kenya Coast Tourist Association (KTCA).

Stakeholders want the government to scale down taxes in the tourism and hospitality industry so as to attract more domestic merrymakers and recreate lost jobs for the youth especially at a time like this when the economy is negatively impacted by the Covid-19 pandemic.

“We don’t have a problem with paying levies since we have to support the government in its endeavors to deliver service. However, some licenses and fees imposed on the industry are a bit punitive. We would appreciate if some of these licenses were traded off for levies,” said Mr. Noorani.

The industry is currently experiencing the burden of paying taxes during this Corona period when business proprietors are required to remit their dues, renew licenses and others do renovation after lockdown.

“With hotels and other tourism establishments reopening, some hoteliers may find it hard to remain afloat. They are struggling to pay the levies and still sustain the workforce and pay suppliers and other bills. We urge the government to consider the removal of some of the levies,” said Mr. Shitakha.

Given the global economic slowdown resulting from the coronavirus pandemic, this year the tourism sector stands to lose.

“Right now, the industry is heavily dependent on domestic tourism. Affordability should be at the highest priority, but with the high taxes and licenses, this becomes a major challenge,” added Mr. Shitakha

Counties such as Mombasa, Kilifi, Nakuru introduced a bed levy for every occupied hotel room. In its 2015/2016 Finance Bill, Mombasa introduced a monthly room levy of between Sh120 and Sh180 per room, depending on the hotel’s size and rating.





About Soko Directory Team

Soko Directory is a Financial and Markets digital portal that tracks brands, listed firms on the NSE, SMEs and trend setters in the markets eco-system.Find us on Facebook: facebook.com/SokoDirectory and on Twitter: twitter.com/SokoDirectory

View other posts by Soko Directory Team


More Articles From This Author







Trending Stories










Other Related Articles










SOKO DIRECTORY & FINANCIAL GUIDE



ARCHIVES

2020
  • January 2020 (272)
  • February 2020 (310)
  • March 2020 (390)
  • April 2020 (321)
  • May 2020 (335)
  • June 2020 (327)
  • July 2020 (334)
  • August 2020 (276)
  • September 2020 (172)
  • 2019
  • January 2019 (253)
  • February 2019 (216)
  • March 2019 (285)
  • April 2019 (254)
  • May 2019 (272)
  • June 2019 (251)
  • July 2019 (338)
  • August 2019 (293)
  • September 2019 (306)
  • October 2019 (313)
  • November 2019 (362)
  • December 2019 (319)
  • 2018
  • January 2018 (291)
  • February 2018 (213)
  • March 2018 (278)
  • April 2018 (225)
  • May 2018 (238)
  • June 2018 (178)
  • July 2018 (256)
  • August 2018 (249)
  • September 2018 (256)
  • October 2018 (287)
  • November 2018 (284)
  • December 2018 (185)
  • 2017
  • January 2017 (183)
  • February 2017 (194)
  • March 2017 (207)
  • April 2017 (104)
  • May 2017 (169)
  • June 2017 (205)
  • July 2017 (190)
  • August 2017 (195)
  • September 2017 (186)
  • October 2017 (235)
  • November 2017 (253)
  • December 2017 (266)
  • 2016
  • January 2016 (165)
  • February 2016 (165)
  • March 2016 (190)
  • April 2016 (143)
  • May 2016 (245)
  • June 2016 (182)
  • July 2016 (271)
  • August 2016 (248)
  • September 2016 (234)
  • October 2016 (191)
  • November 2016 (243)
  • December 2016 (153)
  • 2015
  • January 2015 (1)
  • February 2015 (4)
  • March 2015 (166)
  • April 2015 (108)
  • May 2015 (116)
  • June 2015 (120)
  • July 2015 (148)
  • August 2015 (157)
  • September 2015 (188)
  • October 2015 (169)
  • November 2015 (173)
  • December 2015 (207)
  • 2014
  • March 2014 (2)
  • 2013
  • March 2013 (10)
  • June 2013 (1)
  • 2012
  • March 2012 (7)
  • April 2012 (15)
  • May 2012 (1)
  • July 2012 (1)
  • August 2012 (4)
  • October 2012 (2)
  • November 2012 (2)
  • December 2012 (1)
  • 2011
    2010
    2009
    2008
    2007
    2006
    2005
    2004
    2003
    2002
    2001
    2000
    1999
    1998
    1997
    1996
    1995
    1994
    1993
    1992
    1991
    1990
    1989
    1988
    1987
    1986
    1985
    1984
    1983
    1982
    1981
    1980
    1979
    1978
    1977
    1976
    1975
    1974
    1973
    1972
    1971
    1970
    1969
    1968
    1967
    1966
    1965
    1964
    1963
    1962
    1961
    1960
    1959
    1958
    1957
    1956
    1955
    1954
    1953
    1952
    1951
    1950