Revealed: Ruto's Tax Cuts Made Kenyans Buy More Helicopters, Planes
The tax reforms the CS was referring to were exemptions to ease the load exerted on the aviation sector following the enactment of the Finance Act 2023 in July last year.
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Transport Cabinet Secretary (CS) Kipchumba Murkomen has revealed that President William Ruto's decision to exempt helicopters and aircraft as well as their parts from tax led to an increase in the number of Kenyans registering the aircraft.
Murkomen made the statement on Thursday, April 4 after he met the Kenya Association of Air Operators (KAAO) amongst aviation stakeholders at Wilson Airport.
He further remarked that the increased uptake by wealthy Kenyans on aircraft and their parts has provided more job opportunities for Kenyans in the aviation sector.
"Notably, the industry players acknowledged the tax reforms employed by H.E. President William Samoei Ruto in the sector, which have attracted more investors, resulting in increased aircraft registration and job opportunities for young people," stated Murkomen.
A fleet of helicopters in Kenya. /FILE
The tax reforms the CS was referring to were exemptions to ease the load exerted on the aviation sector following the enactment of the Finance Act 2023 in July last year.
The bill had proposed that importers of these aircraft and parts be exempt from paying the 16 per cent Value Added Tax (VAT), which could affect the cost of importing such aircraft.
It also proposed that aircraft be exempted from the 3.5 per cent Import Declaration Fee (IDF) and the two per cent Railway Development Levy (RDL), making it easier for businesses and individuals to invest in the aviation sector.
Wealthy Kenyans, including politicians during elections, hire helicopters and spend between Ksh150,000 to Ksh400,000 per hour. The tax cuts meant that buyers would save a lot of money in purchasing helicopters worth hundreds of millions of shillings and offer chopper services to interested parties at cheaper prices.
The tax incentives benefited wealthy Kenyans who own choppers and the aviation industry stakeholders. In Kenya, the ownership of choppers and aircraft is a symbol of prestige and wealth.
Some of the country's political and business elite frequently use private jets and helicopters to travel within the country and beyond its borders. Other beneficiaries of air travel include the Kenya Police, Kenya Power and Kenya Wildlife Service as well as local airlines in Kenya.
The tax cuts came as a major boost to the aviation industry, which decried the re-introduction of these levies by the former administration of President Uhuru Kenyatta.
The latest available data from the Kenya Civil Aviation Authority (KCAA) shows that 1,659 were registered in the 2022/2023 Financial Year and from 1,624 in the previous period.
In comparison, the number of registered planes in the country stood at 782 in 2022 an increase of 47 from the previous year.
The statistics eliminated those owned by the National Police Service (NPS) and Kenya Defence Forces (KDF).
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