Kenya Airways is lobbying Parliament for exclusion from paying value added tax (VAT) and the railway development levy, stating that the charges will push the national carrier to collapse. The VAT Bill proposes to tax purchase and lease of aircraft, transportation of tourists and jet fuel after three years of exemption, considered as a transition period. “We can’t afford and we will not continue functioning as an airline if the VAT Bill is passed as proposed,” said Kenya Airways finance director Alex Mbugua during a presentation to the Parliamentary Finance Committee. The House team was non-committal on KQ’s requests, only promising to look into them. Mr Mbugua said that introduction of VAT on international travels would push the prices of their tickets up, putting them at a disadvantage compared to their competitors. Though the VAT on jet fuel will take effect in the next three years, KQ came out fighting stating that they spent Sh41 billion on fuel last year, being 40 per cent of its revenue, and introduction of the tax element would worsen the situation.
Posted on: Wed, 17 Jul 2013 05:16:16 +0000
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