Cabinet Secretary for Tourism Najib Balala (right) flanked by the Resort Manager of Diani Reff Beach Resort and Spa Praveen Rao (left) at the South Coast’s lounge in Kwale County on June 30,2017. (Photo: Maarufu Mohammed/Standard)
Tourism Cabinet Secretary Najib Balala has criticised attempts by the County Government of Mombasa to introduce tourism levies.
In an interview with Weekend Business, Balala said that while the national government was keen on enhancing its collaboration with all the 47 county governments, it was against the law for devolved units to come up with new levies to replicate those already imposed by the Government.
“The opinion of the Attorney General on this matter is clear and it is the national government which has mandate to charge levies on key sectors of the economy,” he said.
There have been attempts by Mombasa County to introduce the levies following the publication of the Mombasa County Local Tourism Bill, 2017.
Already, opposition to the Bill has emerged particularly on clauses that relate to taxes.
“If the Bill is allowed to pass in its entirety, the new taxes and levies will greatly impact on the local tourism industry because they are in conflict with similar taxes and revenues from national government agencies,’’ said Sam Ikwaye, the interim secretary general of Tourism Professional Association.
Kenya Coast Tourist Association Acting Chairman Victor Shitakha said there had not been adequate consultation before the Mombasa County Government came up with the Bill.
“We need to be involved in the formulation of the Bill and ensure that there is no double taxation. Industry players are already heavily taxed and the tourism sector has not fully recovered,” he said.
His views have been supported by other stakeholders. Kenya Association of Tour Operators Coast branch Vice-Chairman Nelson Mburugu said the Bill should not be rushed.
“Let it be subjected to stakeholder scrutiny and input. There should be no double taxation as the industry is already heavily taxed,’’ he said.
The Bill proposes the establishment of a Mombasa County Local Tourism Fund whose main objective will be the development of the region’s tourism industry.
“The fund shall consist of levies, fees and other monies paid under this Act and monies that may be paid to the fund from moneys appropriated for the purpose by the County Assembly,” it reads.
Kenya Tourism Federation Chairman and hotelier Mohamed Hersi said enacting new legislation to raise funds will result in double taxation.
“You will kill businesses that all and sundry are trying hard to set up to attract clients in the hospitality industry,’’ he said.
“These are taxes that Kenyans and their businesses pay. If we overtax, investors and businessmen will be subjected to a hostile environment and will move out,” said Mr Hersi.
Mr Ikwaye said coastal counties have been unable to harness the industry’s potential owing to their failure to fully implement the National Tourism Act.
He said industry players who met at a brainstorming meeting in Mombasa had proposed that beach management be removed from the local county Bill.
“We have argued our case and recommended that elaborate regulations be established by the County Government of Mombasa to address beach management as an independent devolved function,’’ said the official.
He said Mombasa County could adopt laws developed by Kwale County and remove beach management from the Bill.