Mombasa hotel bed levy squashed by Senate ruling – for now

GREEDY COUNTY GOVERNMENTS KICKED IN THE TEETH BY SENATE RULING

(Posted 29th January 2014)

The mood among hoteliers at the Kenya coast improved considerably when it became known that Kenya’s upper house, the Senate, had shot down county governments’ attempts to levy what was described as ‘illegal taxes’ various county governments had introduced and among which Mombasa became one of the most notorious.

The Senate cited a lack of legally required consultations and obtaining clearance for tax measures by county governments across the country, effectively shutting down the attempt by the Mombasa county to extort a bed levy of 200 Kenya Shillings per bed per month from hotels and resorts. Safari operators too were faced with demands to pay a monthly fee for each registered car, equally raising opposition until yesterday some temporary relief was found when the Senate stepped in to squash all such taxes and additional fees introduced by the county.

As reported earlier in the week, coast hoteliers had raised a storm of protests, through the media, direct contact with county government officials where according to one source words were not minced, and apparently through lobbying members of the national assembly and the senate in Nairobi to halt the implementation of the added tax burden.

Under Kenya’s new constitution a devolved system of government was introduced after the last general elections and 47 counties were created to run local affairs locally, a splendid idea or so it appeared at first sight until the cost burden to the people of Kenya became known. Elected county officials were swift to demand for luxury cars, governors demanded luxury mansions and offices – Kilifi is a case in point where the governor wants the county to purchase a 140 million Kenya Shillings beach side mansion for him as his official residence – and raided public coffers through outrageous sitting allowances and other perks, disenchanting the entire country.

The situation was made worse earlier this week when data became public that county governments in average were only proposing to spend less than 10 percent of their budget on development and infrastructure projects while the balance of fund were channeled into salaries and junket travel activities often seemingly unrelated to the job they were elected to do.

‘We told you that we will not pay that extra tax because we are taxed to the limit already. Mombasa county officials better go back to the drawing board and start afresh. We are open for discussions but the recent change in the Mombasa cabinet has not helped at all. We are now dealing with someone who has little idea how the sector functions and only sees us as a cash cow. Mombasa county in fact is trying to milk us cows without feeding us. Let me name garbage collection, connection to the sewerage system, road infrastructure among other areas where they have little to show for. It is good that the Senate stopped them and cut them all down to size. Some of them think they are like national ministers or MP’s and they are just glorified local councilors, nothing else’.

Coast tourism in particular has been suffering of setback with lower arrivals, leaving many hotels and resorts to ponder if to stay open or to close as occupancies across the board are down by 35 percent compared to last year, according to some sources. The formation on national level of a high level consultative platform earlier this week known as Consultative Tourism Recovery Strategy Committee has given the sector some hope but also immediately brought demands that the findings and recommendations of the committee be implemented without fail, unless the entire exercise become a waste of time and resources. Watch this space.