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Recently, the World Bank has offered Kenya yet another loan of Sh4.7 billion mentioned to fund solar power projects and provision of clean cooking stoves in 14 counties.

Kenya

Will free employee holidays amount to taxable benefit?

Treasury Cabinet Secretary Henry Rotich during Thursday's budget reading proposed to amend the income tax act for the next year to give at least 300,000 additional Kenyan guests the opportunity to travel around the country/FILE

Treasury Cabinet Secretary Henry Rotich during Thursday’s budget reading proposed to amend the income tax act for the next year to give at least 300,000 additional Kenyan guests the opportunity to travel around the country/FILE

NAIROBI, Kenya, Jun 12 – Employees in Kenya are now set to go on holiday within Kenya at the expense of their employers’ effective midnight on Thursday.

Treasury Cabinet Secretary Henry Rotich during Thursday’s budget reading proposed to amend the income tax act for the next year to give at least 300,000 additional Kenyan guests the opportunity to travel around the country.

“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.”

“These measures will be effective tonight. Mr Speaker these measures will cost the exchequer Sh2.4 billion in revenue losses.”

Despite the massive incentive, tax consultant from PKF James Mulili told Capital FM News that the government still needs to clarify if the employee will be required to account for any taxes that have been advanced to him by the employer.

“Any expenses that a company incurs on behalf on their employees is normally for tax purposes considered as a benefit to the employed,” he said

“What didn’t come out clearly is, will those amounts that the employer would have paid for such trips.. would they crystallize to be a benefit on the employee and would they be taxable on the employee? Those are some of the things he needs to clarify.”

These are measures put in place as a result of the tourism sector facing a blow due to travel advisories from key markets among them the United States, United Kingdom, Australia and France because of recent terrorist attacks and rampant insecurity in Kenya.

The Kenya Tourism Board on Tuesday launched an online media campaign on tourism recovery as part of its strategy to reassure tourists of Kenya’s safety.

The campaign is part of the global online reputation management where they will push negative press past the second page in search engines and replace them with positive press for six months run by a UK based firm dubbed National Reviews.

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The campaign is themed #WhyILoveKenya with KTB rallying tourists, celebrities, corporate bodies, public and the private sector and friends of tourism sector to tell the world about the uniqueness of the country and how tourism business activities are ongoing despite the travel advisories.

Other measures put in place include reduction of national park fees from $90 to 80 for regional and international tourists and from Sh1,200 to Sh1,000 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 tourism sector is set to lose Sh5 billion following cancellations made between May 2014 and October 2014 owing to the travel advisory issued by the four western nations.

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