Harrison Kivisu and Walker Mwandoto @PeopleDailyKe
The Tourism Fund (TF) is set to regulate the increasingly number of private villas, holiday apartments, cottages and home stays at the Coast as it seeks to generate additional revenue.
TF managers say luxury villas in Malindi and Watamu resorts have not been registered to carry out tourism businesses, hence denying the government millions of shillings in revenue.
The fund’s Chief Executive Officer (CEO), Joseph Cherutoi, says they have started consultative forums with stakeholders in the hospitality industry on the need to manage the sector better.
He lamented that many villas and cottages in Kilifi county, especially in Malindi, Watamu and Mambrui tourist resort towns, have never registered for such business, hence denying the government millions of shillings in revenues. “They are making significant sums of money from renting their properties to visitors on short-term vacations, but many of them do not pay accommodation taxes to the State,” he said.
Cheroti spoke during a meeting at Kilili Baharini Resort and Spa in Malindi where he also met members of the Italian community. While acknowledging that villas, cottages and private home- owners help plug demand for beds during peak holiday seasons, he accused them of luring guests from main hotels.
Cherutoi also wants apartments, villas, cottages and home-stays to start paying the two per cent Catering Levy charged to the industry players in line with new regulations. “This levy is an excellent regulation that could help address the perpetual unfair competition in the hospitality industry,” he added.
The Italian Consul in Malindi, Ivan Prete, welcomed the efforts to streamline the sector, saying it will make it easier for authorities to detect tax evaders. “The Italian community living in Malindi and Watamu are law-abiding residents, but are concerned with multiple taxes they pay on their properties,” he said.
Efforts to streamline the sector have been welcomed by hoteliers who have long felt that unregistered, private renters pose unfair competition. Welcoming the regulations, Plan Hotel General Manager Alexander Zissimatos said private villas were posing a business threat to the conventional hotels.