Airbnb Taxes and VAT Charges in Kenya: The Taxman Strikes Again

digital service tax kenya
Image Courtesy Ushuru

Another month strolls along and so does the taxman as they introduce new taxes and VAT charges to the Airbnb business in Kenya. According to the new regulations, furnished apartments and private villas are now among the licensable accommodation facilities that offer hospitality services. In that light, as per the Tourism Regulatory Authority (TRA), all AirBNB’s must be registered, inspected and licensed by the TRA.

Airbnb Taxes and VAT Charges

The registration deadline is the 31st March 2021 and inspection of units begins on the 1st of April.

You’ll be paying:

  • KES 1,000 Registration and Application Fee
  • KES 26,000 Annually, per house/unit you own
  • A NEMA license Single business permit
  • Home insurance
  • 1% DST
  • 2% catering levy
  • 16% VAT
  • 30% corporate tax because you must be an LTD

You must also provide

  1. The application form
  2. Original deposit slip for application
  3. Traffic/rack rates
  4. Copy of Title Deed/lease agreement for the premises

If you do not conform to this, you will be subject to prosecution, license fees, arrears and penalties. Additionally, late payments will incur a penalty of 10% of the license fee.

According to the Airbnb website, hosts are inclined to pay value-added taxes as well as corporate income taxes.

“You may be able to deduct your expenses from income tax, so you should keep receipts for the costs of running your experiments.”

There is quite a debate on Twitter regarding the whole issue. Some say that it makes no sense that the government is doing this now;

While others state that you cannot expect services without paying for them.

What’s your take on the matter?

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