Kilifi County loses Sh1.5 billion to tax evaders, report
By Joseph Masha
| August 8th 2016
Kilifi County loses about Sh1.5 billion through tax evasion in the mining and hotel sectors, a study has revealed.
The report by ActionAid shows the devolved administration could realise additional revenue with better regulation of the two sectors.
Action Aid has conducted research on tax justice, agriculture and development in the county since 2013.
The study further indicates many hotels operate as unregistered villas while some mining activity is not documented.
Releasing the report at Pwani University in Kilifi on Saturday, ActionAid Kenya official Mwanajuma Hiribae said though Kilifi was blessed with many resources that have a high potential in revenue generation, not much has been realised due to tax evasion.
Ms Hiribae noted some investors in the hotel industry were evading tax as they use the hotels as private villas.
She noted such villas operate as fully classified hotels because they host bigger numbers of guests and offer safari services, among other hotel services, thus dodging payment of the necessary levies to the county.
“Kilifi is endowed with many resources like the hotel industry capable of generating enough revenue to help the administration offer better services to the people. But that cannot be attained as investors are evading tax payments,” she noted.
Kilifi Governor Amason Kingi has confessed the loss of billions of money through rogue investors.
“My administration loses about Sh1.5 billion every year through investors in the hotel industry who register their businesses as villas or cottages and pay less taxes, though they offer full hotel services like accommodation and safaris,” said the county chief.
The governor noted that hotels stretch from Mtwapa, Kikambala, Kilifi, Matsangoni, Watamu, Malindi and Mamburui.
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