Travel Agents Challenge 16% VAT on Air Tickets, Argue Travel is No Longer a Luxury in Kenya

The Kenya Association of Travel Agents (KATA) has launched a petition in response to the proposed 16 per cent Value Added Tax (VAT) on select air services, including air tickets issued by travel agents.

KATA's leadership, including Chairman Joseph Kithitu and CEO Nicanor Sabula, asserts that this tax is rooted in a flawed perspective, portraying air travel as a luxury exclusively affordable for the wealthy. KATA contends that characterizing air travel in this way is not only outdated but also misleading, given that it has become an essential component of life for many Kenyans.

This transition is attributed to the expansion of the middle class, the rise of domestic tourism, and the introduction of affordable travel options. The association points out that the growth of budget-friendly domestic airlines has diversified the profile of air travellers, now encompassing professionals, small business owners, students, and rural residents. These groups depend on air travel for various needs, including business, education, familial responsibilities, and leisure.

The consequences of the proposed VAT raise significant concerns for KATA, who warn that its implementation could have detrimental effects on the economy, particularly for small and medium-sized enterprises that rely on efficient travel to access broader markets and identify new opportunities. KATA notes the inconsistency of imposing a tax on air travel while exempting other transportation modes, such as buses and trains, stressing that travel is necessary for both business and personal purposes.

Moreover, KATA emphasizes that, while air transport can be costlier compared to other public services, it is nonetheless critical for the population's connectivity and mobility. They argue for a reevaluation of tax policies, advocating that the government adopt a perspective recognizing air travel as integral to the modern lifestyle of many Kenyans.

The association has acknowledged the government's tax relief measures for essential items, like flour, which benefit lower-income households, calling for a similar understanding regarding the necessity of air travel.