PRESIDENT Uhuru Kenyatta has made a U-turn on austerity and announced a raft of new measures to revive tourism. The measures including tax incentives and park fees reduction will be rolled out between May 29 and June 12.
Recent terrorist incidents have discouraged tourists from visiting Kenya, especially after the UK, US issued travel advisories. In July the budget removed tourism from VAT exemption in a bid to boost revenues.
However the immediate price rises of 16 per cent resulted in a fall of both domestic and foreign tourists. “The tourism sector plays an important role in our economic development, both directly and indirectly.
Since last year, the sector has experienced some challenges, which have impacted negatively on its performance,” President Kenyatta said yesterday after meeting stakeholder son Friday.
The turnaround measures are expected to increase the number of local tourists to 300,000 annually. “The government, with effect from June 12, will allow all corporate and business entities to pay vacation trip expenses for their staff on annual leave in Kenya and deduct such expenditures in their taxes,” President Kenyatta stated.
The Kenya Revenue Authority has been ordered to refund hotels and tour companies outstanding VAT refunds “not later than next Thursday”. “We expect this measure to improve sector liquidity and cash-flow,” Uhuru said.
Air ticketing services by travel agents will be exempt from VAT next week while landing charges at Moi International Airport Mombasa and Malindi Airport will be slashed by 40 per cent and 10 per cent on May 29.
Malindi Airport will be upgraded to international standards to allow for charter tourism and to enable larger commercial aircraft to land. International tourists will now pay $80 (Sh7,028) per day to visit national parks, down from $90 (Sh7,906).
From June 12 locals will pay Sh1,000, down from Sh1,200. Uhuru also cancelled the Treasury instruction preventing public institutions from holding conferences in private hotels.
He urged the Parliament, Judiciary and county governments to reallocate their foreign travel budgets to domestic travel. Next week a Tourism Stimulus Programme will be launched to promote domestic tourism.
In the medium term, the government will set up a task force to position Kenya as the preferred destination in Africa for tourists and to attract at least five million guests in the next five years.
Peter Gatere, managing director of Pega Tours in Nakuru, said the “unexpected good news” will save his business that was on the verge of collapse due to cancellations.