Operators have called for clarity on a new VAT law in Kenya which could increase holiday prices.

The Value Added Tax Act 2013 that came into force on September 1 adds a 16% levy on certain services offered by 
tour operators.

However, there is confusion throughout the sector about which holiday elements the VAT will apply on. Some advice suggested it applied to transfers and could include game park fees.

Somak chief executive Ash Sofat told Travel Weekly the new VAT regime would have a negative impact on tourism numbers, which are already suffering.
He said road transport had definitely become subject to VAT, pushing up the cost of transfers.

Sofat said: “Suppliers are charging extra to cover the VAT on transport bookings already.

“We are still waiting for clarity on whether game fees will be affected by this. The industry is calling for clarity but there is also anger because visitor numbers are already down.”

The African Travel and Tourism Association (Atta) said the industry had not been given time to incorporate the changes into their businesses. Its own survey revealed camp and lodge operators believed they would have no choice but to increase their prices by 5% to 10% to cope wth the new charges.

UK operators will have to absorb the additional tax on current bookings for 2013.

A spokesman for the Kenya Tourist Board said it would be contacting its partners once it had clarification on the issue.