Tourists arrive at the port of Mombasa in January. Photo/FILE
Parliament and the Treasury are expected to implement major tax incentives in a bid to encourage more Kenyans to travel in a bid to cushion the tourism sector.
President Uhuru Kenyatta on Friday unveiled nine key measures to stimulate domestic markets, but some of them require House approval, which resumes on Tuesday next week, if they are to be included in the Budget.
The initiatives include employers paying for a week’s holiday for their staff and getting the cost deducted from their taxes.
The move is expected to “give at least 25,000 Kenyans a chance to go for a week’s holiday every month at the expense of their employers,” said a statement from State House. This will be effective from June 12, the date the Treasury traditionally tables its Budget.
The government will also remove VAT on air tickets and park entrance fee, which were introduced under the VAT Act 2013.
In the stimulus plan, from this week air ticket services will be exempt of VAT, a move that will make air travel cheaper.
Players in the industry welcomed the incentives as they would cushion investors in the short-term but more will need to be done to sustain the industry in the long-term, especially to attract foreign tourists.
“In the immediate its a good things. These are some of the things we have been pushing for as an industry but we also need in place a long-term strategy,” said the chief executive of Pride Inn Hotels, Anthony Ngunga. “We need sustainable measures.”
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