The Kenya Association of Air Operators (KAAO) took a significant step in championing the interests of the nation’s aviation sector by appearing before the National Assembly Committee on Finance and Planning. This crucial engagement, held on 26th May 2025, allowed KAAO’s Board of Directors to present comprehensive submissions regarding the potential impact of the proposed Finance Bill 2025 on the industry.
At the heart of KAAO’s advocacy is a deep concern over the Finance Bill 2025’s proposals to reintroduce Value Added Tax (VAT), Import Declaration Fees (IDF), and the Railway Development Levy (RDL) on critical aviation components. Specifically, these proposed charges target aircraft, aircraft parts, and essential maintenance services. For many years, these specific items have enjoyed exemptions from such levies, a deliberate policy move designed to foster the growth and ensure the long-term sustainability of Kenya’s burgeoning aviation sector.
The reinstatement of these charges, as highlighted in KAAO’s presentation, would usher in a significant escalation of operational costs for air operators across the board. This financial burden poses a serious risk to the substantial progress Kenya has made in solidifying its position as a leading regional aviation hub. The industry has invested heavily in infrastructure, training, and services, all contributing to making Kenya an attractive destination for aviation businesses and a crucial transit point for air travel within East Africa and beyond. Reversing the long-standing exemptions threatens to erode these gains, potentially making Kenyan airspace less competitive and increasing the cost of air travel and air cargo.
KAAO’s appearance before the committee underscores its unwavering commitment to its core mandate: advocating for robust policy and regulatory frameworks that actively promote the growth, resilience, and competitiveness of the aviation industry. The Association believes that a thriving aviation sector is not only vital for economic growth and job creation but also plays a pivotal role in connecting Kenya to the global economy.
The engagement with the National Assembly Committee on Finance and Planning is part of KAAO’s ongoing, proactive efforts to collaborate with policymakers. The Association remains dedicated to ensuring that the unique priorities and operational realities of the aviation sector are fully understood and appropriately reflected in the country’s fiscal policies. KAAO will continue to engage in constructive dialogue, providing expert insights and advocating for a policy environment that supports the continued expansion and viability of Kenya’s aviation industry, ultimately benefiting the entire nation.
