President William Ruto's administration is proposing to do away with at least three sweeping taxes, handing Kenya's rich a major reprieve in the importation of choppers.
This is as the Kenya Kwanza has submitted to Parliament troves of tax proposals that analysts have said would hurt the country's poor despite the skyrocketing cost of living.
The National Treasury plans to hit the middle class with higher fuel and salary taxes to fund Ruto's record Sh3.59 trillion budget for the 2023/23 financial year.
The Finance Bill, 2023, contains proposals to exempt importers of aircraft, especially choppers, from paying the 16 per cent Valued Added Tax (VAT).
The government also proposes to do away with the 3.5 per cent import declaration fee (IDF) and the two per cent Railway Development Levy (RDL).
Robert Waruiru, a partner in charge of tax and regulatory at Ichiban Tax & Business Advisory, told Business Daily that buyers of choppers will be the biggest beneficiaries.
“The major beneficiaries are buyers of aircraft not exceeding 2,000 kilogrammes and helicopters of less than two tonnes and aircraft of more than 2,000 kilogrammes,” said Waruiru.
This is a major policy shift from retired President Uhuru Kenyatta's administration that reintroduced the three levies, hitting hard the aviation industry.
Choppers have become the most popular mode of transport among Kenya's rich including politicians even as millions of the poor wallow in abject poverty.
Other than airlines, Kenya Police, Kenya Power and Kenya Wildlife Service, choppers have also become popular among wealthy individuals and politicians.
With the latest reprieve, the sky is expected to witness a busy flight schedules as the rich fly over amid a biting cost of living.
Ironically, the Ruto administration has gone after the middle class, raiding their pockets with more taxes including enhanced salary levies to fund the pensions and the affordable housing programme.
Before July 2021, the purchase of certain types of helicopters, aeroplanes and aircraft gear as well as parts such as tyres did not attract any tax.
It costs between Sh150,000 to Sh400,000 per hour to hire a helicopter.
The exemption also applied to individuals seeking to lease or hire helicopters.
After the Finance Act 2020, persons seeking to hire or buy aeroplanes of an unladen weight not exceeding or exceeding 2,000 kilogrammes started paying VAT on their imports.
