Uhuru orders major incentives to spur tourism

May 23, 2014
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The Kenya Revenue Authority will be required by Thursday next week to pay all outstanding income tax related refunds owed to tourism industry players/FILE
The Kenya Revenue Authority will be required by Thursday next week to pay all outstanding income tax related refunds owed to tourism industry players/FILE
NAIROBI, Kenya, May 23 – All private firms will from June 12 get a tax rebate if they cater for vacation trip expenses for their employees in Kenya during their annual leave.

In a statement on Friday, President Uhuru Kenyatta said this was one of the government’s measures to encourage domestic tourism as well as salvage the whole sector which has been adversely affected by insecurity challenges.

Through this, at least 25,000 Kenyans will get a chance to go for a week’s holiday every month bringing to total over 300,000 additional Kenyan guests in local hotels across the country.

The President revealed the new steps after holding a meeting with tourism sector stakeholders at State House, Nairobi.

“Last year, international arrivals dropped further. With the recent advisories from some in our traditional source market that account for about 46 percent, the tourism sector is likely to continue facing difficulties,” he noted.

The government has also with immediate effect revoked the National Treasury Circular restricting the public service from holding conferences and other meetings in private hotels. The circular had earlier been made in efforts to cut down on public expenditure.

“In view of the importance of the tourism sector in Kenya’s economy, especially its multiplier effect on various sectors, the government and stakeholders have agreed measures to get the numbers back into our hotels, and growing it on a sustained basis to at least 10 million visitors annually in a decade,” the President said.

The Kenya Revenue Authority (KRA) will be required by Thursday next week to pay all outstanding income tax related refunds owed to tourism industry players.

“We expect this measure to improve sector liquidity and cash flow.”

The government has reduced national park fees from $90 to 80 for regional and international tourists and from Sh1,200 to Sh1000 for domestic tourists.

On the other hand, the government has reduced landing charges for both local and international flights by 40 percent and 10 percent respectively which will see flights increase into Moi international Airport and Malindi Airport.

“The government has allocated adequate resources to expand Malindi Airport to international standards to allow for larger commercial aircrafts to land. This will encourage growth of charter tourism,” President Kenyatta said.

In a move likely to see drop in the cost of air tickets, all air ticketing services supplied by travel agents shall be exempt under the VAT Act, 2013 to also enhance our competitiveness in the region from next week.

The Head of State said they plan to develop an interactive Kenya Tourism Portal within a week, to promote and manage booking and distribution of domestic guests under the Tourism Stimulus Program.

Meanwhile in the medium to long term measures, a task force will be constituted with a mandate of developing a strategy to address underlying challenges in the tourism sector.

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