The City Lodge Hotel was completed in early 2018, qualifying the Bryanston-based firm for capital allowance of 150 percent of the value of the investment.
The tax break is given to companies investing at least Sh200 million to construct buildings outside the city of Nairobi and municipalities of Mombasa and Kisumu.
City Lodge says it will spread the tax allowance to its other operations in Kenya including Nairobi’s Fairview Hotel and Town Lodge.
The Kenya Revenue Authority (KRA) has given South African hospitality group City Lodge a tax break worth hundreds of millions of shillings to help the multinational recover the cost of building a hotel at Nairobi’s Two Rivers complex.
The City Lodge Hotel was completed in early 2018, qualifying the Bryanston-based firm for capital allowance of 150 percent of the value of the investment.
The tax break is given to companies investing at least Sh200 million to construct buildings outside the city of Nairobi and municipalities of Mombasa and Kisumu. City Lodge says it will spread the tax allowance to its other operations in Kenya including Nairobi’s Fairview Hotel and Town Lodge.
“An allowance of 100 percent was approved in respect of City Lodge Hotel at Two Rivers Mall by the Kenya Revenue Authority (KRA),” the multinational said in a trading update.
“This will lead to a zero normal tax charge for the entire Kenyan operation until such time as the allowance is fully utilised. A cash flow benefit exists due to the suspension of normal tax payments, until such time as the allowance is fully utilised.”
City Lodge did not disclose the size of the tax waiver which it had been waiting for since 2018.
The hotel at Two Rivers has 171 rooms.
The tax incentive is offered to boost projects outside the major towns where there is high concentration of investments, including manufacturing plants.
The same is enjoyed on capital expenditure on buildings and machinery used for manufacturing under bond or in export processing zone as well as special economic zones.
Nairobi has hogged most of the investments in fixed assets including factories, warehouses, residential and office buildings.
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Note: The results are not exact but very close to the actual.
