Mombasa hotels, entertainment joints oppose proposed levies
Tourists enjoy the sunshine at Bamburi Beach Hotel in Mombasa. Mombasa County government has introduced new levies to increase its revenue base, with some being resisted by traders and investors.
Mombasa County government has introduced new levies to increase its revenue base, with some being resisted by traders and investors.
The businesses targeted by Governor Abdulswamad Nassir in the supplementary Finance Bill 2022/23 include big companies, international schools, hotels and bars.
In the proposed bill, that is at the public participation stage, hotels will part with one per cent of their annual sales to the devolved government.
The levy has met stiff resistance from industry players.
For three days, the governor has held discussions on the new levies with officials of the Kenya Association of Hotelkeepers and Caterers, Kenya Association of Tour operators, Kenya Coast Tourists Association (KCTA) and the Pubs, Entertainers and Restaurants Association of Kenya.
“This is the third engagement with the industry in recent weeks as we work to revamp tourism ahead of the festive season. We have also found a common ground on the Finance Bill,” Governor Nassir said.
In the proposed bill, the devolved government introduced a city levy that is expected to be charged to firms in the hospitality industries which are Kenya Revenue Authority-ETR compliant.
“Those paying city levy will be exempt from single business permit, fire inspection and health inspection. Large bars will pay Sh50,000, from Sh22,500,” the bill says.
Hoteliers who spoke to the Saturday Nation said engagements are ongoing after industry players rejected the levy.
“It is very discriminatory and does not reflect the output of the industry. No other sector surrenders one per cent of sales to the county government,” an investor who did not want to be identified said.
“One sector cannot be treated differently from the rest. But we have had negotiations. We will sign a memorandum of understanding upon reaching an agreement.”
Doubling the charge
Hoteliers pay levies to agencies like the National Environment Management Authority, Music Copyright Society of Kenya, the Tourism Regulatory Authority as well as to the devolved governments.
KCTA chairman Victor Shitakha said Governor Nassir has assured stakeholders that he will look into the matter.
“The governor has considered our plea. We will formulate a bill that is accepted by all,” he said.
If no changes are made to the bill, an establishment will part with Sh10,000 instead of Sh4,000 when applying for or renewing a liquor permit.
The charge for a general retail alcoholic drink licence will double to Sh100,000 while a wholesale alcoholic drink permit per establishment will be Sh100,000.
The owner of a depot will surrender Sh100,000 to the county government while a distributor alcoholic drink licence will be Sh100,000 from Sh50,000.
Supermarkets and franchise retail stores alcoholic drink permits will go for Sh150,000, up from Sh80,000.
International schools will pay Sh250,000, up from Sh100,000. Mombasa has about 10 such schools, mostly situated in Nyali and the central area of the city.
