NAIROBI, Kenya, Dec 4 – The Kenya Association of Travel Agents (KATA) has rejected a proposal by the government to introduce VAT on air ticketing services supplied by travel agents.
The Association Chief Executive Officer (CEO), Nicanor Sabula, said the proposed VAT on air ticketing services will result in the closure of businesses and job losses in the aviation industry.
While presenting its petition before the National Assembly Committee of Finance and Economic Planning, Sabula termed the proposal as discriminatory, calling for its total rejection.
“The petition called for the scrapping of the proposal to introduce VAT on air ticketing services supplied by Travel Agents,” he said.
According to Sabula, the proposal by the National Treasury would disadvantage Kenyan travel agents, leading to loss of business competitiveness.
He argued that taxing air ticketing services is likely to impact Kenya’s small and medium-sized businesses, which rely on affordable domestic flights to expand their reach and access opportunities.
“Many entrepreneurs and workers travel within Kenya to secure contracts, attend conferences, and network, all of which support economic growth and job creation. If air ticket prices rise due to new taxes, it could limit access for these business travelers, ultimately affecting productivity and the economy,” he stated.
KATA stated that the government should focus on positioning Kenya as a regional economic hub by enhancing affordable travel options that are cost-effective to meet the demands of a rapidly modernizing economy.
“Air travel may seem an unlikely target, but for a growing number of Kenyans, it’s a part of their livelihoods. Categorizing air travel as a “rich-only” service fails to recognise the real and growing need for accessible, affordable travel options,” Sabula added.
As part of government measures to increase its tax base following the withdrawal of the Finance Bill 2024, the National Treasury proposed the introduction of new taxes, including taxes targeting the aviation sector.
The National Treasury is seeking to introduce 16 percent VAT on a number of air travel-related services, such as air ticketing services by travel agents and hiring.
Other tax proposals include aircraft navigation systems, chattering, and leasing of aircraft.
According to the Treasury, the taxes are necessary towards expanding the government tax base and ensuring that a wider array of services contributes to national revenue.
