Kenyan airlines have warned that the country will lose its regional aviation competitiveness if the proposed value-added tax (VAT) on imported aircraft and spacecraft is implemented. The Association of Air Operators (KAAO) and the African Airlines Association have objected to the removal of VAT exemptions on aviation-related imports, citing concerns over the direct impact on regional competitiveness and the advancement of Kenya’s aviation sector.
The Kenya Revenue Authority (KRA) has proposed the 16% VAT on the importation of aircraft and spacecraft, which would increase the cost of operations for airlines and potentially lead to job losses. The airlines have urged policymakers to prioritize strategies to safeguard these critical exemptions in line with both the International Civil Aviation Organisation and the East African Common External Market Tariff on zero-rated taxes on aviation.
Citations:
[1] https://www.andyfisher.ca/blog/stdc46ad106353cdvcetjon28.html
[2] https://twitter.com/BD_Africa/status/1799038598320398608
[3] https://ntvkenya.co.ke/news/kenya-will-lose-its-regional-aviation-competitiveness-due-to-new-taxes/
[4] https://nation.africa/kenya/news/workers-churches-businesses-against-proposed-taxes-4649780
[5] https://www.ch-aviation.com/news/140633-kenyan-airlines-object-to-proposed-end-of-vat-exemptions