MOMBASA, Kenya, Jan 31 – Tourism Stakeholders at the Coast have asked the national government to consider tax exemption for hotels in the region to enable them reinvest back the money.
According to the Diani Reef Managing Director Bobby Kamani and Kenya Association of Hotelkeepers and Caterers Coast Executive Director Sam Ikwaye, some hotel facilities at the coast have struggled to upgrade due to hard economic times.
Majority of hotels built several years ago have ageing facilities.
Kamani said the tax exemptions will free up capital which will be used to renovate the facilities in order to attract more visitors and become competitive.
“As hoteliers, we agree that we must improve on our facilities and services that we offer. However, we are requesting the government to consider giving hoteliers some tax exemptions and make it mandatory for the hotels to reinvested back the money,” he said.
“We need to get a formal directive from the national government on tax exemptions. You will see very improved facilities and services offered,” said Kamani.
Ikwaye said tax exemption policy should be thought through with very minimal red tapes or bureaucracies that come with it.
For example, he said, the national government had already announced a tax exemption on building materials for hotels, but the red-tapes that were put in place made it impossible for hoteliers to enjoy.
“If you want to import tiles, you have to make sure that they are branded with the hotel name. How is that even making sense. You cannot force an investor to brand tiles,” said Ikwaye
Coast region’s tourism industry started declining at around 1997 during the Kaya Bombo tribal clashes.
Ikwaye said further losses were incurred during the disputed 2007 general elections.
“Investors started looking at tourism as a risky venture, and majority left. Those who were left behind could not refurbish their facilities because of poor business,” he said.
Ikwaye said even though the sector is slowly picking up, the cost of doing business currently is much higher than the return on investment.
He said this is because of duplication of taxes imposed by both the national and county government.
“Counties look at hotels as money-making ventures, therefore they insist on charging bed levies and the national government is already taking 2 per cent of each accommodation. This is double taxation,” said Ikwaye.