Tax relief for Kenya’s airlines as VAT on spare parts is dropped

KENYA’S AIRLINES BREATH SIGH OF RELIEF AS VAT ON SPARES DROPPED UNDER NEW BUDGET

(Posted 18th April 2017)

Under the recently read budget proposals for Kenya will the country’s aviation sector benefit greatly, as according to information received from Nairobi VAT on aircraft spares has been removed, not just for national airline Kenya Airways but for all airlines.
In 2013 did the current government, against better advice and judgement and leaving international practice behind, introduce VAT on aircraft spares which – as was reported here at the time – saddle the aviation sector with VAT for spare parts which at the time added tens of millions of US Dollars to the cost of doing business in Kenya for airlines which regional competitors were laughing about these follies.
At the time were also tourism services made subject to VAT, a decision which cost the country overall dearly due to rising cost into a softening and then collapsing market before these measures were then shelved two years ago to make tourism more competitive in the region again.
The changes now affected bring Kenya in line with how other countries treat their aviation sectors and gives hope that fares and charter prices will remain stable for some time to come.

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