Kenya Travel Agents CEO warns against proposed air travel VAT
The CEO of the Kenya Association of Travel Agents (KATA) has spoken out against the National Treasury's proposal to introduce a 16% VAT on air travel-related services, arguing it impacts all travellers, not just the wealthy. The proposal includes VAT on air ticketing, aircraft leasing, and navigation systems.
While acknowledging the government's efforts to provide tax relief on essential goods, the CEO argues that the proposed air travel tax overlooks the vital role air travel plays across all socioeconomic levels in Kenya. With the rise of budget airlines, domestic air travel has become increasingly accessible for business, education, family visits, and tourism. In some cases, air travel is the only practical option due to underdeveloped road infrastructure.
The CEO emphasises that taxing air travel will disproportionately affect small and medium-sized businesses that rely on domestic flights. Increased ticket prices could hinder business travel, impacting productivity and economic growth. Affordable air travel is also key to Kenya's goal of becoming a regional economic hub.
The CEO contends that air travel is a public service, similar to other modes of transportation that are not taxed. The proposed VAT fails to recognise the growing need for affordable travel options and should be reconsidered to reflect air travel's role in supporting economic opportunity for all Kenyans.
Source: The Standard