Employers keen on holiday tax incentive – Kandie

July 22, 2014
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Kandie said that while her ministry will release the exact figures in due course, "initial reports are that it has been taken up very well."/FILE
Kandie said that while her ministry will release the exact figures in due course, “initial reports are that it has been taken up very well.”/FILE
NAIROBI, Kenya, July 22 – East Africa Affairs, Commerce and Tourism Cabinet Secretary Phyllis Kandie has announced a positive uptake of the tax rebate offered to employers who pay for their employees’ vacations domestically.

Kandie said that while her ministry will release the exact figures in due course, “initial reports are that it has been taken up very well.”

Kandie was speaking at the official launch of the Taskforce on Tourism Recovery following gazettement of the appointment on July 11.

The taskforce was initially set up in January with nine members but was expanded, Kandie said, to ensure all stakeholders were included.

The expanded 17-member taskforce, she said, would report to President Uhuru Kenyatta on a monthly basis on their progress while the Chairperson of the Taskforce, Lucy Karume, would give a, “public report,” every two weeks with the Taskforce expected to meet early every Tuesday morning.

The Taskforce, Kandie went on to say, would additionally be charged with implementing the strategies they proposed including those announced by President Uhuru Kenyatta in May.

“So we are fire fighting as we move along,” she said.

It was in May that President Kenyatta announced the tax deduction he said he hoped would increase hotel bookings by giving, “25,000 Kenyans a chance to go for a week’s holiday every month at the expense of their employers.”

The tax incentive which came into effect on June 12, Treasury Cabinet Secretary Henry Rotich said, would cost the exchequer Sh2.4 Billion in revenue losses.

“I have proposed to amend the Income Tax Act to allow deductions of expenditure paid by employers on vacation trips made within Kenya for a period of 12 months,” he said in his budget statement on June 12.

Another tax measure announced by President Kenyatta in May is the exemption of all air ticketing services supplied by travel agents from tax under the VAT Act, 2013, “to enhance our competitiveness in the region.”

Kandie had in April blamed insecurity for a decline in international tourist arrivals and to counter which the government is actively engaged in spurring domestic tourism, hence the tax rebate offered to employers who pay for a week’s domestic vacation for their employees during their annual leave in the 2014/15 financial year.

The Taskforce members as currently constituted to spearhead this turnaround are: Lucy Karume (Chairperson), Ibrahim Mohamed (Vice-Chairperson), Robert Marini, Muriithi Ndegwa, J. S. Vohra, Adam Jillo, Chris Modigell, Philemon Mwavala, lawyers Cecil Miller, Donald Kipkorir, Julius Kipng’etich, Jostine Machuma Barmao, William Kibet Kiprono, Nicholas Bondo, John Mruttu, Chris Diaz and Alice Mwololo with Mary Luseka and Kaplich Barsito making up the Secretariat.

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