Operators of Airbnb and serviced apartments are a worried lot after the government started targeting their earnings with regulations and taxes, amid a spiraling national debt as Kenya seeks new ways to raise revenues through taxation.
The Tourism Regulatory Authority (TRA), in a statement, said it will start registering and licensing all serviced apartments, houses and villas which are operating in Kenya.
“Furnished apartments and private villas are among the licensed accommodation establishments that offer regulated hospitality services. They are listed in our 4th Annex of the Tourism Board Regulations 2014 and must be registered, inspected, and approved by TRA before the start of operations,” said a statement by TRA’s Central regional director Moses Karanja.
Karanja added that operators of such establishments must meet minimum licensing requirements for them to be registered by TRA and issued with the regulatory license.
Airbnb and serviced apartment operators will each now need to pay a yearly fee rather than per unit owing to the current harsh economic times occasioned by the Covid-19 pandemic.
“Each member must pay an initial license fee for 2021 on which he will have to pay for each unit in 2022,” the statement added.
An Airbnb in Kilimani, Nairobi. PHOTO/COURTESY
The Airbnb website has indicated that hosts must pay value-added taxes (VAT) and corporate income taxes in their countries.
“You may be able to deduct your expenses from income tax, so you should keep receipts for the costs of running your experiments. Certain other taxes or duties may be applicable. We recommend that you check with your local tax advisor or attorney if your business may be subject to additional taxes or duties,” the site adviced.
Airbnb and serviced apartments have grown in popularity in recent years and have bitten a huge chunk of hotels’ and lodges’ cash, in the process reducing revenue to the government.
But local Airbnb operators have opposed the move, especially the Sh26,000 annual fee, saying it would adversely affect their income and they were not engaged in the formulation of the regulation that has far-reaching effects on the nascent industry.