To pay or not to pay – that is now the question for Mombasa hoteliers


(Posted 27th January 2014)

Emotions are running high, and rightly so, between coast hoteliers with properties falling under the Mombasa county government and that very same devolved government, many now wish to hell and beyond.

The dispute arose when the county assembly passed a new tax, which will require hoteliers to cough up 200 Kenya Shillings per room per month at a time when occupancies are low and reducing further.

News last week that in average county governments only spend less than 10 percent in investments for infrastructure but mindboggling amounts for salaries, perks, travel, cars, entertainment and governor’s mansions – news broke that the Kilifi county government has signed a deal for a 140 million Kenya Shilling ‘beach side mansion’ for their megalomaniac governor – only added to the woes for the Mombasa county government, and in fact for all county governments, about tax demands vis a vis prudent spending practices.

Some incensed hoteliers now vowed not to pay the tax, claiming it would drive their already stretched financial situation to breaking point and force closure of hotels and resorts along the beaches of Mombasa.

Some hoteliers in fact now also queried, in communications with this correspondent, their agreement last year to pay a garbage collection levy, claiming that the county government has failed to ensure regular garbage collection and that this is adding to the disenchantment of visitors coming to Kenya.

Hot off the press figures for South Coast resort occupancies show that the average has fallen to below 60 percent in room occupancy at a time of the year when in boom times those occupancies were in the high 80 and low 90 percent margins and similar low figures are emerging from contacts at the North Coast of Mombasa, which would be affected by the new tax burden.

Key tourism stakeholders on the Consultative Tourism Recovery Strategy Committee are reportedly planning to look at the tax burdens the sector has to pay with special attention to the VAT charges levied last year on a range of tourism services, which increased the cost of safaris considerably already but also the issue raised by their colleagues over double and triple taxes from national to county governments plus the range of fees they have to pay, many of which were raised too.

Meanwhile though is a battle of will shaping up in Mombasa between hoteliers and the county government over how or rather if to pay the new tax with one regular contributor ranting: ‘I will not pay and when they come to force collection I will close down like some other colleagues are planning too. Just wait when the staff laid off start to mob the county offices and demonstrate outside in the streets. This is a recipe for bankrupting us and it also shows that we elected idiots into position of power who should look after goats’. Harsh words, with more unprintable utterances not repeated here from this and other sources. Watch this space as a new battleground for the already embattled tourism industry at the Kenya coast has just opened up.

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