The 2016/17 budget reading in the Kenyan parliament yesterday has met one of the key demands of the country’s tourism industry, when Cabinet Secretary for Finance Henry Rotich proposed to remove the Value Added Tax (VAT) on park entrance fees, which three years ago raised the cost to visit national parks by a whopping 16 percent.
Another key demand sent to government in various submissions was also met when tour operator services were also earmarked to have the 16 percent VAT removed, again reducing the cost of safaris and excursions for foreign visitors.
In addition, the budget proposed to hand the sector 4.5 billion Kenya shillings for promotional purposes, which, however, needs to be seen in comparison to past budgets and the funds actually released year on year.
On the downside, airport departure taxes will rise for travel abroad from US$ 40 to US$50 while for domestic air travel the fees charged will rise from the present 500 Kenya shillings to 600 Kenya shillings.
The funds raised are supposed to be put into a special tourism promotion fund, but to accomplish that relevant laws and regulations will first need to be changed, as funds raised through airport departure taxes hitherto went into a different budget line and were under a different governmental oversight.
Arrivals from the beginning of 2016 continue to rise, establishing a trend started in October last year, when the downward spiral finally bottomed out after nearly four years of constant decline. The fund availed for promotion, as long as they are released in a timely manner, should allow the Kenya Tourism Board to roll out their recovery marketing programs across the world, including for domestic and regional travel and increased travel from the rest of Africa into Kenya.