W@ssup

The Kenya Association of Travel Agents (KATA), under the leadership of Chairman Dr. Joseph Kithitu and CEO Nicanor Sabula, has taken a firm stand against the proposed 16% VAT on air ticketing services and other aviation-related costs outlined in the Tax Laws (Amendment) Bill 2024. In a petition presented to the National Assembly Committee on Finance and Economic Planning during the ongoing public participation forums, KATA argued that the proposed tax would have far-reaching negative consequences on the aviation and tourism sectors, the economy, and Kenyan businesses.

KATA highlighted that the VAT proposal would disproportionately affect Kenyan travel agents, diminishing their competitiveness both regionally and internationally. The association warned of potential business closures, job losses, and reduced affordability of air travel. While the tax might generate short-term revenue, the long-term repercussions could be devastating, including reduced tax revenues from a declining tourism and aviation industry.

This opposition is echoed by other stakeholders, including the International Air Transport Association (IATA), which has strongly advocated for retaining the current VAT exemptions. They argue that increasing operational costs for the aviation industry would discourage investment, reduce domestic and international travel volumes, and disrupt the broader tourism ecosystem.

The tourism sector, a cornerstone of Kenya’s economy, would be particularly hard-hit. Many tourism-related businesses depend on the affordable and efficient air travel facilitated by local travel agents. KATA stressed that the new tax would make Kenya less competitive compared to regional rivals like South Africa and Tanzania, which offer more favorable tax regimes.

Both KATA and IATA have urged Parliament to reconsider the VAT proposal, advocating instead for policies that promote growth in aviation and tourism. Maintaining VAT exemptions, they argue, would encourage investment, increase domestic travel, and generate sustainable revenues through related sectors such as hospitality and transport.

KATA remains committed to championing the interests of its members and the broader travel industry. The association is calling on stakeholders to unite in safeguarding the sustainability of Kenya’s tourism and aviation sectors while urging policymakers to prioritize long-term growth over short-term revenue gains.

Kenya’s position as a leading safari and tourism destination is at stake. Collaborative action is essential to ensure that the country continues to thrive as a hub for travel, tourism, and aviation.