Sunday, September 15, 2013

Tour firms to raise fees as VAT begins to bite

Tourists at the  Maasai Mara Game Reserve. Photo/FILE

Tourists at the Maasai Mara Game Reserve. Photo/FILE  COURTESY

By MATHIAS RINGA
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Tour firms are set to raise the cost of their packages by 16 per cent on October 1.

The move comes after the government early this month introduced a 16 per cent Valued Added Tax on transportation of tourists.

According to Kenya Association of Tour Operators (Kato) Coast branch chairperson Monika Solanki, tour companies will revise their fees to cope with the tax.

She noted that the new safari package charges will take effect on October 1.

Ms Solanki said that a tourist who travels from Mombasa to the Maasai Mara game reserve will be charged between $1,160 (Sh100,920) and $1,624 (Sh141,288). Currently, the package costs between $1,000 (Sh87,000) and $1,400 (Sh121,800).

“The firms have been forced to pass the VAT burden to tourists to survive the harsh environment for doing business,” she said on Sunday.

This, she added, would make Kenya an expensive destination for safaris, crippling the tourism sector, which is already struggling.

The Kato official said Kenya stands to lose potential wildlife enthusiasts to other African destinations as it is viewed an expensive destination for game drives.

She said tourists are already preferring to visit Tanzania instead of Kenya due to high park fees and warned that the imposition of the VAT will cripple the sector even further.

Tanzanian parks, she said, charged between $35 (Sh3,045) and $40 (Sh3,480) per person, compared to $65 (Sh5,655) and $80 (Sh6,960) charged in the Kenyan parks.

OTHER DESTINATIONS

Rhino Safaris Group chief accountant Joseph George said some foreign travel agents were planning to send tourists to other destinations, if the 16 VAT is not withdrawn.

At the same time, some tour companies will bear the brunt of the VAT, since they signed contracts of up to December 2014 with foreign agents, Mr George said.

Agents, he said, are now preferring to take visitors to Tanzania, South Africa and Namibia.

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