KENYA’S AIR OPERATORS WANT VAT ON SPARE PARTS WAIVED
(Posted 24th March 2014)
Kenya’s air operators last week made urgent representations before several committees of the national assembly, aiming to have the 16 percent VAT waived from spare parts for light aircraft. A comprehensive review of VAT applications is presently underway and an amendment bill likely to be tabled soon, addressing a range of anomalies and in particular areas where the introduction of VAT in last year’s finance bill had a detrimental effect on both the cost of living in Kenya as well as on specific sectors.
While it could not be ascertained if the tourism industry at large was also lobbying members of parliament to have VAT on tourism services shelved, which led to significant increases in the cost of holidays to Kenya and is at least in part blamed for the downturn in tourist arrivals, at least the air operator fraternity is not sitting on their hands and using all available means to have VAT now charged on spare parts removed.
Nairobi’s Wilson Airport is home to many light aircraft operations flying daily scheduled services to the country’s national parks, game reserves and to secondary airfields like Lamu and Ukunda / South Coast of Mombasa, providing a crucial link for both tourists and locals to parts of Kenya where the jet airline operations from Jomo Kenyatta International Airport do not reach due to runway lengths and lack of navigational facilities. However, the cost of operations went up considerably when VAT was introduced in last year’s budget and this reportedly resulted in a drop of passenger numbers and flight movements at Wilson Airport. Watch this space to find out if the appeals were successful when the amendment bill enters the final hearings.