Kenya Moves to Overhaul Tourism Levy System with Sharper Oversight and Broader Tax Base

Kenya's Ministry of Tourism and Wildlife is pushing for a landmark shake-up of how tourism levies are handled, proposing a clear separation between the collection of funds from hotels and restaurants and the management of those resources. The move, aimed at boosting efficiency and transparency, could reshape the financial backbone of one of East Africa's most vibrant tourism markets and offers valuable lessons for travel industry professionals across the continent.

In its submissions on the Tourism Amendment Bill before the Departmental Committee on Tourism and Wildlife, the Ministry recommended that the Tourism Fund continue collecting levies, while the Cabinet Secretary takes charge of overseeing how the money is managed. At present, the Tourism Fund collects two percent of revenue from regulated hotels and restaurants, channelling the proceeds to key state-owned tourism bodies such as the Kenya Tourism Board, Tourism Research Institute, Bomas of Kenya, and Kenya Utalii College.

Should the proposals sail through, the Cabinet Secretary's mandate would grow to include shaping the Fund's operational policy, deciding the amounts payable, and setting the conditions under which disbursements are made. Tourism Cabinet Secretary Rebecca Miano informed the Committee, chaired by Maara MP Kareke Mbiuki, that the amendments are essential to help the government finance tourism activities and institutions in ways that mirror today's fast-changing realities.

Miano stressed that modernising the legal framework would allow it to respond to fresh opportunities and lay a stronger foundation for future growth. According to her, the reforms are designed to sharpen coordination, boost institutional performance, and cultivate an environment where investment, innovation, and sustainable growth can flourish within the sector.

Tourism Principal Secretary Julius Bitok explained that the recommendations mirror the working relationship between the Kenya Revenue Authority and the Central Bank of Kenya. Drawing from the Public Finance Management approach, KRA collects funds through e-Citizen and deposits them with CBK for Treasury-driven allocation. He argued that a transparent and efficient revenue flow would empower the Ministry to plan and roll out programmes that develop and market the sector more effectively while reinforcing its financial architecture.

The Committee is weighing the Bill alongside other proposed amendments meant to align Kenya's tourism laws with global standards and lift the country's competitiveness on the world stage. Among the more striking suggestions is the merger of the Kenya Tourism Board and the Tourism Research Institute, together with a broader restructuring and consolidation of selected Semi-Autonomous Government Agencies.

Mbiuki pledged wide-ranging public participation on the Amendment Bill to ensure broad agreement, particularly on more sensitive matters. He extended an invitation to stakeholders and citizens alike to bring their views forward, emphasising that consensus-building is central to the process. The MP also urged the Ministry to widen the tax base beyond conventional hospitality players, calling for the inclusion of Airbnb and similar short-term rental platforms, which have long enjoyed a competitive edge over licensed accommodation providers.

Additional submissions were received from the Office of the Attorney General, the Kenya Law Reform Commission, the Tourism Research Institute, and the Kenya Tourism Board, underscoring the collaborative spirit driving the reform agenda.

For Africa's travel trade, Kenya's initiative carries significant weight. As destinations across the continent contend with the rapid rise of digital booking platforms and the need for stronger regulatory frameworks, Nairobi's push could serve as a blueprint for how governments balance revenue collection, industry growth, and modern-day realities. Professionals working in tourism will want to keep a close eye on how these proposals unfold, as they may well shape the direction of travel policy across sub-Saharan Africa in the years ahead.