Kenya: Govt Orders Kenyans Running Serviced Apartments and Homestay Units to Pay Levy

Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-27 11:42:46

The Tourism Fund has recently issued a directive to owners of serviced apartments and homestay units to pay the required tourism levy within a period of 30 days. This mandate comes as a result of the Tourism Act which mandates various entities offering accommodation services to remit levies based on the income they generate each month. According to the law, the levy payable is set at 2% of the income generated per month for accommodation services, as well as for the sale of food and beverages, among other services.

Serviced apartments are accommodations that function similarly to short-term rentals, with the distinction that these units have employees present to cater to the needs of the guests. On the other hand, homestay units consist of Kenyan individuals who host guests in their own homes.

The notice issued by the Tourism Fund specifies that all serviced apartments must comply with Order 2 of the Tourism Levy Order. This particular order dictates that owners of tourism activities and services within Class A & B enterprises are required to pay a levy equivalent to 2% of their gross receipts from monthly sales of food, beverages, accommodation, and other services. It is important to note that serviced apartments, homestays, and villas fall under Class A & B enterprises as defined in the Ninth Schedule.

The Fund further warned that failing to comply with this directive would result in heavy fines. Those who do not make the required payments on time will face an instant penalty of Ksh5,000, along with an additional penalty of 3% of the levy amount due for each month that the payment remains outstanding.

Owners of serviced apartments across the country were advised to register their businesses with the Tourism Regulatory Authority. No penalties will be enforced during the initial 30-day grace period provided to these businesses. However, after this grace period elapses, the government will take legal action against non-compliant entities.

It is important for all affected businesses to adhere to the directive, as outlined by the Tourism Fund. By remitting the tourism levy within the stipulated timeframe, these entities can avoid facing penalties and legal repercussions. Compliance with the law ensures the sustainability and growth of the tourism sector, benefiting both business owners and the industry as a whole.

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