The Tourism Fund has brought in a debt recovery firm to pursue long-standing levy arrears as it tightens enforcement and moves to plug revenue gaps that have built up over the years, including during the Covid-19 slump.
Outstanding dues exceed Sh1 billion, though the Fund has not released a precise figure. Board of Trustees chair Samson Some said the engagement of a third-party collector forms part of a wider clean-up plan aimed at distinguishing ongoing compliance from historical debts, some of which are tied to collapsed enterprises and public institutions.
According to Mr Some, the board is focusing on securing near-total adherence to current levy payments while addressing legacy arrears under a separate framework. The tourism levy, set at two per cent of gross sales for licensed hotels, restaurants and tourism establishments, is collected on behalf of the government and must be remitted to the Fund by the ninth of each month.
He noted that confusion over the levy’s nature has fuelled past defaults, with some operators mistakenly treating it as an operational expense rather than a statutory pass-through charge. In reality, the funds are collected from consumers for the State and are not revenue belonging to the businesses themselves.
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The pandemic exacerbated non-payment as tourism operators grappled with cash flow pressures and prolonged closures, often prioritising commercial creditors. Even so, Mr Some argued that Covid-19 cannot wholly excuse the arrears, given that the levy is factored into customer pricing.
Recovery efforts are further complicated where public institutions owe levies while simultaneously benefiting from Tourism Fund financing. That overlap, he said, creates a delicate balancing act that requires careful handling as the Fund seeks to restore discipline and safeguard its revenue base.
