“Our biggest competitor is Tanzania. Their product is similar, you only have to fly 10 more minutes to reach their shore and now their prices are more competitive. And it’s not just the VAT, why can’t we adopt a special visa rate for families instead of making them pay USD50 a head,” Marini questioned.
But while acknowledging that the VAT puts Kenya at a disadvantage, Kandie was adamant that, “the tax is going nowhere.”
“We know that the competition has suspended the implementation of the VAT but I would want to believe that this is temporary as an East African Community we are working towards harmonisation of VAT and I know that will come in at some stage, say in 18 months,” she said.
Until then however, Marini called for a suspension of the tax until the harmonisation is complete with Modigell sharing his sentiments.
“What we need is political good will. I mean how do you admit on one hand that times are tough and then burden us with more taxes? And then you have the gall to tell us to lower our prices in order to be within reach of more Kenyans while for every Sh100 I make you take Sh27. How about you lower your taxes,” he countered.
The Chief Executive Officer of the Kenya Association of Hotel Keepers and Caterers Mike Macharia was however not wholly convinced that Uganda and Tanzania would follow suit with the VAT as Kandie projected.
“They’re laughing at us. How do you tax the service charge when it’s already declared as income and subject to pay as you earn? It’s ridiculous,” he said.
The means to get the tourists to the coast was another concern raised by the hoteliers:
“I don’t see why we can’t adopt an open skies policy because we can no longer rely on charters. And ever since Kenyatta senior was head of government, we’ve been talking about a road direct from Likoni to Msambweni. We can’t just advertise, there needs to be ease of access,” Modigell urged.
And while recognising that charter flights to the coast have indeed declined, Kandie said the government was not keen to rush into adopting an open sky policy.
“It’s actually more complicated than we think. We have to be careful not to disadvantage our national carrier. That’s why I’ve organised for the tourism recovery committee to meet with my transport counterpart in order to better understand what it means,” she said.
But even as Kenya works to get more visitors across its borders and down to the coast, Modigell held that it was necessary they, “find the house clean.”
“I have a friend who worked in Kenya’s hospitality industry in the 80s before moving away. He’s currently visiting and when he got here he was appalled by the plastics everywhere, the broken sewer system and it’s not just that; the water supply is unreliable and my friend in Thailand pays a quarter of what I pay for electricity and he manages a 800 room hotel with eight elevators,” Modigell complained.
