Hotel Levy

Hotel levy is imposed to an operator of hotel, guest house, restaurant and other tourism services. The levy is charged at the rate of twelve percent (12%) of the taxable value of chargeable services.

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. 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.