Taxes and Levies

Hotel Levy

Hotel levy is imposed to any activity carried on with a view to profit or gain. This also includes Hotel, Guest House, Restaurant or establishment providing tour operating services by whatever name called, providing an accommodation, food and other services to a guest or visitor on consideration.


The Levy be charged at the rates specified as follows:

The Levy imposed shall be:
1. Fifteen percent (15%) of the charges for accommodation including breakfast but excluding all other services;
2. Ten percent (10%) of the charged for any other services rendered to the guest or visitor such as meals, drinks, beverages, Sightseeing, laundry or entertainment.

Registration
Any person who engages in hotel business shall be duly registered by the Commissioner prior to the commencement of his business and all applications for registration shall be made to the Commissioner using form. (Form No...)

If the Commissioner is satisfied a Certificate of registration shall be issued to a taxable person registered, which will state the name, principal place of business, taxpayer identification number, hotel levy registration number and the date on which registration takes effect.

The taxpayer identification number and hotel levy registration number shall be shown in all returns, notice of appeal or other documents used for the purpose of this Act

It is required that a certificate of Registration issued shall be displayed in a conspicuous position at taxpayer's place of business

Registration Cancellation
Any person, who is no longer required to be registered, shall give notice to the Commissioner by writing explaining is no longer running the business. If fails to give notice he/she commits an offence and upon conviction is liable to a fine not less than fifty thousand shillings but not exceeding two hundred thousands shillings.

In addition to that if the Commissioner is satisfied that any person no longer required to be registered, may be for subject to any other conditions prescribed in Act or regulations, including the payment of all hotel levy due, cancel the registration with effect from the date of the notification or from any other date which may be determined by the Commissioner.

So the Commissioner shall, in writing, notify the person referred to in this section of the date on which the cancellation takes effect.

Penalties
Where any taxpayer who is liable to pay the levy fails to pay the whole or any part of such levy, within such time and in such manner as may be prescribed by regulations made there under:-

  1. An additional levy equal to twenty five percent (25%) of the unpaid amount of the levy shall be payable by way of penalty;
  2. in a case where such amount remains unpaid for more than thirty days (30) after the prescribed due date the rate of the additional levy prescribed shall be increased by ten per centum (10%) of the amount of levy remaining unpaid in respect of each period of thirty days or part thereof during which the levy remains unpaid and such taxpayer fails to submit the prescribed returns and statements in time and in the manner prescribed by this Act or the regulations made there under, he shall be liable to pay a penalty not exceeding Five Hundred Shillings (Shs. 500/=) for each day during which the default continued.
  3. The penalties mentioned in this section may be imposed by the Commissioner after hearing the defaulting taxpayer.