Domestic aircraft operators are calling for reduced duties subjected to the industry which could hurt growth as tour and travel industry continues with recovery.
748 Air Services Moses Mwangi says there is need to borrow from best practices where aircraft parts are not subjected to Value Added Tax.
“That would ease the burden and the easing of the burden would go down to ticket prices. This will allow a huge proportion of the population to fly and that would grow our economy,” said Mwangi.
Under the Finance Act 2013, importers of aircraft parts are required to pay 16% VAT on imported parts.
This comes as Treasury exempted Kenya Airways from paying VAT on imported parts aimed at easing operational expenses on the struggling flag carrier.
Mwangi further says the industry has been penalized with heavy duties being subjected to it such as the Railway Development Levy which is charged at a rate of 2% of the value of parts imported for use in Kenya.
“I wish we can start paying aviation levy so that we grow the hub which is JKIA so that its bigger and accommodate more aircraft. Nairobi is an ideal national hub but the market its being taken over by others. If we had aviation levy we would change JKIA and have a second runway, change current terminal to domestic and create another international terminal. This would be helpful,” said Mwangi.
Mwangi also called on speedy implementation of the African Open Skies Policy or the Yamoussoukro Decision which seeks to liberalized the continental aviation sector.
“The worst we can ever do is to close the sky. There is nothing better than like opening the skies and we should not be selfish. The multiplier effect in it, the kind of jobs its going to create by having so many aircraft fly directly to Kenya from every corner of the world is so much a bigger,” said Mwangi.
According to Mwangi, African economies stand to benefit from the policy which will ensure the African aviation industry recovery after being grounded due collapsed travel industry.
According to African Airlines Association (AFRAA), airlines in the continent lost an estimated Kshs. 880 billion ($8 billion) due to COVID-19.Liberalization of African skies is backed will increase the share of African global air service market from the current 1% and boost intra-African trade.748 Air Services which has continued to diversify from humanitarian services to passenger has recently launched its fifth destination to […]