Aviators warn Finance Bill 2024 will increase air travel costs

The Kenya Association of Air Operators has joined the growing list of sectors expressing concerns over the Finance Bill 2024.

The Bill proposes to eliminate Value-Added Tax exemptions granted to the sector, an issue that aviation players want reviewed.

They noted that the removal of the exemption will lead to a significant increase in acquisition costs for airlines and operators.

This, they said, will lead to an increase in air travel and charter services, cargo services, as well as maintenance and training prices. 

According to the association, the removal of the exemptions will undermine the substantial progress achieved in recent years, thereby posing a significant risk to the sector's sustainability and contribution to Kenya’s economy.

The proposed Bill seeks to remove vat exemption on aeroplanes and other aircraft on unladen weight exceeding 2,000kgs but not exceeding 15,000kgs.

It further seeks to remove exemptions on spacecraft (including satellites) and suborbital and spacecraft launch vehicles as well as hiring, leasing, and chartering aircraft, among others.