Terror, VAT takes a toll on tourism
14 October 2013, 16:13
Nairobi - Analysts forecast the tourism sector might not recover fully from the recently-introduced value-added tax (VAT) and the insecurity the terror attacks posed to the industry.
The industry is reeling from a depression in the first half of the year leading to the analysts' concerns that higher taxes might make the country a less attractive tourist destination.
The tax introduction in September subjected the main tourism services like transport, travel commission, park and conservation fees to higher pay rates resulting in the decline in tourist arrivals to 4.3 percent as compared to the first quarter of the year.
Late last month, terrorists attacked the Westgate shopping mall, killing more than 60 people.
VAT Act might have a bigger effect than Westgate siege
Nikhil Hira, tax partner at Deloitte said that the VAT Act might have a bigger effect than the Westgate siege as the tourist arriving on packages were the ones likes to be affected due to their price sensitivity, especially in coast.
Despite the downfall in the industry, Henry Rotich, the Tourism Treasury Secretary, is confident in the sector turning its fortunes around.
Tourism is the second largest source of foreign exchange revenue following agriculture.
The main tourist attractions are photo safaris through the 19 national parks and game reserves.
– CAJ News