Tourism Fund targets Sh3.5b from levies

Tourism Fund CEO Joseph Cherutoi (right) and the corporation's Levy Services Director Charles Okeyo addressing Journalists in Narok. [Robert Kiplagat, Standard]

A government agency has embarked on renewed registration of tourist establishments in a plan to raise Sh3.5 billion from levies by the end of this financial year.

The Tourism Fund (TF) has so far netted over 1,000 new hotel camps, restaurants and bars across Kenya that will be paying two per cent tax as it seeks to shore up revenue.

In the 2017/18 financial year, TF collected Sh2.5 billion, an increase of Sh500 million on 2016/2017 and the target this year is nearly 40 per cent more than last year’s revenue.

Tourism Fund Chief Executive Joseph Cherutoi said the drive will help the the country boost its tourist numbers and also improve the training of industry players on better practice.

“We want to bring on board more establishments and scale up our incomes. This will see us strengthen the industry and help earn the country more revenues,” he told Weekend Business in an interview at his office.

Among the radical measures to increase revenue, the fund has engaged all the 47 county governments to ensure compliance by hospitality facilities.

The move, Mr Cherutoi said, was meant to build a data base for all tourist facilities where the levies can be collected.

“We are targeting Sh3.5 billion this financial year. Our current collections since July have given us every indication we will hit the target and perhaps even exceed if everything is kept constant,” he said.

Created six years ago under the National Tourism Policy and the Tourism Act, Act 2011, TF -- which replaced the Catering and Tourism Development Levy Trustees -- is responsible for development of tourism products and services.

It is also mandated to market Kenya as a tourist destination through the Kenya Tourist Board as well as other activities including communication, crisis management and training.

Cherutoi said the enhanced cash flow will help to develop diverse tourism products that will give a unique experience to both local and international visitors, and enable the country to shift from concentrating on beach and safari tourism.

TF runs training programmes for workers employed in the hospitality industry including taxi operators and boat riders to acquaint them with tourism products and how to interact with guests.

In 2015, the fund roped in villas, apartments, restaurants and home-stay facilities as well as hostels and supermarkets running restaurants to pay the levy. TF is already implementing a new directive where tourism establishments pay a two-per cent levy in line with regulations introduced last year.

Any tourism establishment whose gross sales on food, drinks and accommodation amounts to at least Sh250,000 a month is required to pay the levy. In the past, only hotels and big restaurants were required to remit the tax.

During a registration drive in Narok, Nakuru Regional Manager Henry Kirui said they had netted 180 new hotels and camps in Laikipia and Masai Mara regions within a month of the outdoor “aggressive” campaign.

“These registrations will help us boost levy collections in the region, the third biggest collector after Nairobi and Mombasa regions. We target to bring on board 300 new signings before the end of the financial year,” he said.

Mr Kirui said the new entrants will help push the region’s revenue collection beyond their target of Sh517 million in the 2018/19 financial year.

Set target

“Given the new establishments, we plan to raise Sh600 million, an additional Sh83 million from our set target, and in the next three years we want to push this to Sh700 million so as to help the operations of the TF,” he said.

Kirui said the elevation of Nakuru to city status this December will boost the hospitality industry in the county and help them raise more money. He however said ‘flying camps’ in the Masai Mara that keep on being moved were a challenge in registration and only through constant follow up would they be netted. 

“All tourism establishments are required to register with the fund within 30 days of operation. But since some are temporary, they manage to evade paying the levy,” he said.  

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