Hotel and bar owners complain of over taxation

Hotel and pub owners in Migori town have complained about the numerous and expensive taxes that they have to keep on remitting for them to remain operational.

The owners say that beginning of January, there are at least ten different taxes that they have to be compliant with in order to be allowed to freely operate.

Dan Okwiri, who manages one of the hotels within the town says that even though people view the business as lucrative, it is a mirage that is far from the truth.

“The venture is full of challenges and whoever starts one must tighten his belt for the tough ride involving the ever-recurrent taxation,” he said.

Okwiri who has served in the business venture for over 12 years says that the taxes have been a limiting factor to the blooming of the business.

According to Okwiri, who is the director of County Lodge Hotel in Migori, the National Environmental Management Authority charges at least over 50,000 per year apart from other miscellaneous levies.

The license caters for the study of the effluents and the sewage disposal strategies that must be approved by the body.

Secondly, Tourism Regulatory Authority (TRA) which vary from 20,000 to 30,000 and may go beyond this.

Okwiri who spoke to KTMN said that as the owners of hotel and restaurant entities, they undergo a lot of asking the government should for a reprieve.

He also admitted that apart from the TRA and NEMA licences that are equally exploitative, they are also forced to pay trade licenses to the county government to be allowed to operate.

The license which he says that cost 30,000 is sometimes collected by those masquerading as county officials who offer them fake licenses for the gullible business owners.

“We are also required to subscribe to the Kenya Breweries by paying Liqour License in order for us to be allowed to order liquor drinks from the Kenya Breweries Company,” he added.

Exploitative taxes against low sales

Okwiri who also doubles as the secretary to the Migori Hotel association admits that at off-peak periods, the hotel owners are forced to endure losses due to a low number of customers.

He narrates that on a fateful day during the tough economic periods, he can make only sales of one crate in a period of four days.

“During the hard economic times, I may sell only one crate of liquor in four days,” he narrates.

This makes the business tough due to the low income makes it hard to maintain the employees forcing them to release some.

More taxes

As Okwiri explains, the Music Copyright Society of Kenya, (MCSK) is another regulatory body that they have to subscribe to.

This further complicates issues for the traders due to false music producers who want nothing less than Kshs 50,000.

“We also have the Music Copyright Society of Kenya that exploit the traders by demanding more than what they should, if you ask me,” he recounted.

The bar owners also say that they are required to remit 2% of the growth usually known as the Catering Levy.

To top the list of taxes in this venture is the Kenya Revenue Authority which they have to be compliant with by filing returns annually.

The miscellaneous expenditure

The business owners say that in a business that requires constant presence of electricity, they have to dance to every tune of music caused by power blackout.

Sometimes, the business owners are falsely cut out of the power supply forcing them to use alternative ways.

This further exploits them as they have to turn to their personal accounts to get the business running.

The health officers who are ever around the pubs sometimes fake unconducive environment reports making them give out cash for ‘lack of maintaining high hygienic standards’.

Hotels shutting down due to over taxation

Currently, the rate of hotels shutting down is on the rise as the owners have been exploited by over-taxation.

As Okwiri explains, four hotels have been forced to shut down due to the over-exploitation by the taxes.

This according to the owners is due to the lack of the government to create an accommodative environment that encourages them to invest more.

County meetings outside the county

Moses Njororge who owns three hotels in different towns attests to the fact that the county government does not support their business uniformly.

He says that most of the meetings by the county governments are done outside the county, enriching the hotels in those counties at the expense of the hotels in Migori County.

The owners further say that the county bosses are also busy starting their own hotels in order to award the hotel tenders to their own entities which ploughs back the funds into their personal accounts.

“The County officials have continued selectively awarding tenders to the hotels they have shares or their own hotels in order to get back the catering funds into their accounts,” said Njoroge.

The hotel and pub business owners are now appealing to the government to consider reducing taxes or to consolidate them into one to avoid the recurrence of taxes.

“We appeal to the government to consolidate the taxes into one or rather consider reviewing the many licenses which make it hard for us to operate,” said Njoroge of Gilly Hotel in Migori.

Call for price standardization

The imbalance in the sale prices further make other hotels to lose customers aiding the failure and closer of the pubs and hotels.

They implore the government to form a regulatory body that will ensure standardized prices for the liquors to enable fair competition. The owners are now calling on County government to help them thrive just like businesses which thrive in the county.

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