A recent proposal from the National Treasury has sent ripples of concern through Kenya’s travel and tourism sector. At the heart of the debate is a plan to introduce a 16% Value Added Tax (VAT) on a range of aviation services, including the crucial air ticketing services provided by travel agents.
This move has been framed by some as a way to ensure the wealthy pay their fair share, resurrecting the outdated and misguided notion that air travel is a “luxury service” exclusively for the rich. This characterization is not only inaccurate but also dangerously short-sighted. It misrepresents the realities of Kenya’s modern economy and threatens to undermine a critical engine of national growth.
Air Travel: A Growing Necessity, Not a Luxury
The perception of air travel as a luxury is a relic of the past. Kenya’s air travel industry has grown rapidly in recent years, reflecting the country’s expanding middle class, the growth of domestic tourism, and the rise of affordable travel options.
Domestic airlines like Jambojet, Skyward, and Safarilink have made it possible for Kenyans from diverse income levels to travel domestically, whether for business, education, family obligations, or tourism. For instance, it’s now common to find fares from Nairobi to Mombasa or Kisumu for as low as Sh5,000, making air travel an attractive alternative to long bus journeys, particularly in terms of safety and time saved.
Moreover, in regions where road infrastructure is still developing, air travel remains the only practical choice, allowing people to traverse the country with ease and efficiency. While air travel in Kenya is still a significant expense for the average citizen, to assume that those flying between cities such as Nairobi, Eldoret, Kisumu, Lodwar, or Wajir are exclusively wealthy is a fallacy. The reality is that today’s travelers are professionals, small business owners, students, and rural residents visiting family.
The Direct Impact on Business and Kenya’s Economic Ambitions
The proposed tax on air ticketing services is likely to hit Kenya’s small and medium-sized enterprises (SMEs) the hardest. These businesses are the backbone of the economy and rely on affordable domestic flights to expand their reach, access new markets, and seize opportunities.
Entrepreneurs, salespeople, and consultants regularly travel within Kenya to secure contracts, attend conferences, and network. These activities are the lifeblood of economic growth and job creation. If air ticket prices rise significantly due to new taxes, it will limit mobility for these essential business travelers, ultimately stifling productivity and hampering economic expansion.
This move is particularly paradoxical given that Kenya aims to position itself as a regional economic hub. Affordable and efficient travel options are not a perk but a fundamental requirement for achieving this goal. For a rapidly modernizing economy, air travel is no longer a luxury; it is a cost-effective and essential solution for meeting the demands of commerce in the 21st century.
The Petition for a Fair Tax Environment
This week, officials from the Kenya Association of Travel Agents (KATA), led by Chairman Dr. Joseph Kithitu and CEO Nicanor Sabula, presented a formal petition to the National Assembly Committee of Finance and Economic Planning. Their message was clear: the proposal to introduce VAT on air ticketing services is discriminatory and will have severe negative consequences.
KATA argues that this tax would immediately disadvantage Kenyan travel agents, making them less competitive against international online booking platforms that may not be subject to the same tax. The inevitable result would be a loss of business, the closure of local enterprises, and significant job losses across the sector. The association contends that the short-term gains from VAT collection would be far outweighed by long-term declines in overall tax revenue due to a shrinking industry.
Balancing Revenue with Accessibility: A Call for Thoughtful Policy
While the government has an obligation to explore all avenues for tax revenue, it is essential that any changes in tax policy consider the broader implications on everyday Kenyans. Air transport, just like other modes of transportation, is a public service consumed by mwananchi at a slightly higher price. It is for this same reason we don’t tax matatus, bus fares, or even SGR fares.
Air travel may seem an unlikely target, but for a growing number of Kenyans, it’s a part of their livelihoods. Categorizing it as a “rich-only” service fails to recognise the real and growing need for accessible, affordable travel options.
The Treasury’s move to offer tax relief on basic household essentials is welcomed and will greatly benefit Kenya’s lower-income households. But as Kenya’s economy evolves, so too should our perspectives on “luxury” versus “necessity.” Air travel is today increasingly becoming a basic part of the fabric of Kenyan life, with significant benefits to local economies, small businesses, and personal well-being. Thoughtful tax policy should reflect this reality, balancing the need for revenue with the right to affordable travel for all.
A Connector of People and Commerce
Beyond business, air travel is a vital artery for tourism and social connection that serves a wide cross-section of Kenyans.
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Tourism: The sector is a major employer and source of foreign exchange. Taxing air travel makes Kenya a more expensive destination, potentially deterring visitors and hurting everyone from tour guides and hotel staff to safari drivers and artisans.
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Diaspora & Family Connections: Millions of Kenyans abroad rely on affordable air travel to visit family and maintain cultural ties, bringing valuable foreign currency into the local economy.
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Regional Trade: Within the East African Community, air travel is essential for trade, integration, and the movement of professionals.
Conclusion: An Enabler of Opportunity, Not a Privilege
The proposal to tax air travel overlooks the fact that the aviation ecosystem is a major contributor to the economy. Making it more expensive to fly doesn’t just tax “the rich”; it taxes the entire value chain that depends on connectivity. It is a tax on tourism, a tax on export businesses, a tax on international investment, and a tax on the families of the diaspora.
The government risks killing the goose that lays the golden egg. A thriving aviation sector supports hundreds of thousands of jobs and generates substantial revenue through existing taxes.
As Kenya looks to grow as a competitive and inclusive economy, it’s clear that air travel is more than a service for the wealthy. It’s a bridge across communities, regions, and economic divides, and any tax policy should reflect its role as an enabler of opportunity—not as a privilege of the elite.
The call from KATA and other industry stakeholders is not against contributing to national development, but for a tax policy that is fair, non-discriminatory, and designed to foster growth rather than stifle it. The National Treasury must scrap this specific proposal and engage in a deeper, more collaborative dialogue. The goal must be to safeguard the connectivity that powers modern Kenya for all its citizens.
The question is not whether the wealthy can afford a new tax, but whether Kenya can afford the long-term economic cost of making itself less connected.
Nicanor Sabula