Aviation industry struggles to keep up despite aircraft parts tax cuts | Airlines

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ICT Cabinet Secretary Eliud Owalo alights from a chopper at Lwanda Konyango grounds, Migori County on May 8, 2023. The tax cuts to the industry were seen to benefit politicians and the rich. [Caleb Kingwara, Standard]

When the Finance Bill, 2023 was made public in April last year, one of the clauses that kicked up a storm was the proposal to remove taxes on helicopters and aircraft parts.

Many Kenyans reacted angrily, noting how the Kenya Kwanza regime was quick to gift wealthy Kenyans tax cuts as the rest of them reel under heavy taxation.

The Finance Bill – which has since transitioned into the Finance Act, 2023 – included the controversial housing levy, a higher Pay As You Earn (Paye) tax rate of 35 per cent for some employed Kenyans, while Value Added Tax (VAT) on fuel doubled to 16 per cent and turnover tax increased to three per cent from one per cent.

In the weeks that followed, aviation sector players would have a difficult time explaining to Kenyans, including a section of MPs, that while scrapping taxes on choppers and aircraft parts would indeed benefit wealthy Kenyans, helicopters and other aircraft are also essential for security operations, agriculture sector and medical evacuations.

The sector players also argued that it employs many Kenyans directly and indirectly besides supporting other industries, including tourism and agriculture.

And now they say those opposed to the tax cuts may not be aware of the punitive tax regime that the industry had to grapple with. Mercy Mutiso, the…

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