In a momentous achievement for the air transport sector, Kenya Association of Air Operator’s
proposals for tax exemptions on the importation of aircraft and aircraft spare parts have been
successfully incorporated into the Finance Act 2023. After a vigorous campaign and multiple
engagements with the Ministry of Roads and Transport, National Treasury and the East African
Community (EAC) Assembly, the industry has reason to celebrate as six out of the seven
proposals put forth have been gazetted, heralding a new era of growth, investment, and
The aviation industry has long been a critical driver of economic development, facilitating trade,
tourism, and connectivity both domestically and internationally. However, the high cost of doing
business mainly driven by the taxes and charges imposed, has resulted in the decline of the
growth and development of the industry, compelling operators to relocate to neighboring
countries. Recognizing this challenge, industry stakeholders under the association have
advocated for tax relief measures that will stimulate growth and enhance the industry’s global
The six successful proposals in the Finance Act 2023 are:
1) VAT exemption on Aircraft, Aircraft Parts and Aircraft Spare Parts;
2) VAT exemption on Flight Simulators;
3) Exemption from IDF on Aircraft, Aircraft Parts and Aircraft Spare Parts;
4) Exemption from RDL on Aircraft, Aircraft Parts and Aircraft Spare Parts;
5) Exemption from RDL, IDF on Engines;
6) Removal of the stay of application of the Common External Tariff that imposes import
duty on light aircraft and helicopters (<2,000Kgs).
While we are elated with these successes, we also recognize the two challenges that impeded the
approval of our proposal on VAT for domestic fuel. First, the complexities arising from having
two levels of VAT on fuel in the market and second, the potential safety risks associated with
adulteration of JetA1 and AVGAS. However, we remain committed to engaging with the
relevant agencies in the future to find viable solutions to these challenges.
Our achievement in the successfully advocating for these tax exemptions and the support of the
Government is a significant win for the industry, positioning Kenya as a competitive aviation
hub with far reaching benefits for the broader economy.

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