Levy leaves city bars staggering in debt arrears

Bar and restaurants are lobbying the Treasury to review licensing fees that have led to accumulation of arrears and penalties by the operators.

Pubs, Entertainment and Restaurant Association of Kenya (Parek) national chair Alice Opee said the regulations requiring payment of between Sh8,500 to Sh46,000 by establishments in annual licensing fee to the Tourism Regulatory Authority (TRA) will cripple their business.

In 2015, the government imposed licence fees on different players in the hospitality industry under the Tourism Regulations 2014.

The licence fee is based on gross receipt and type of facilities by the operators and attracts 10 percent penalty every month unpaid.

“Arrears dating back from the last four years have caused uncertainty. However, consultations are ongoing as members strive to pay some arrears and we hope it will be resolved early 2020,” Ms Opee said.

The licences add up to two percent of revenue with cash paid to the Tourism Fund, mandated to collect the levies to finance development of the tourism industry.

The hospitality industry says the fees are high and now want consolidation of some of the regulations.

She said some restaurants and pub owners pay for almost 18 licences in a year including those for water, waste and drainage collection.

Due to the slow pace of clearance of the fees, the TRA unsuccessfully requested the Treasury through the Tourism ministry for waiver on the arrears.

“Through a discussion and request presented to us by Perak, we tried to engage the Treasury to waiver the arrears. However, it rejected the proposal,” TRA compliance director Jack Omondi said.