The National Assembly Committee on Delegated Legislation has cleared the way for the exemption of Kenya Airways (KQ) and its subsidiaries from minimum tax.
In its report tabled on the floor of the house last week, the Committee has recommended that Members of Parliament (MPs) approve the exemption which was first sponsored by the National Treasury.
The Planning Ministry made the proposal through Legal Notice No.27 of 2021 which sort to exempt an airline and its subsidiaries in which the government holds at least a 45 per cent stake from the minimum tax.
The national carrier requested exemption from the Treasury citing the impact of the COVID-19 pandemic on the aviation industry along with its role in the economy including marketing Kenya as a tourist destination and trade facilitation.
If adopted, the exemption is expected to extend to KQ subsidiaries including Jambojet in which it holds a 100 per cent stake, Kenya Airfreight Handling Limited and African Cargo Handling Limited.
Others are, KenCargo Airlines International Limited and Fahari Aviation Limited (Pride Oil Limited).
The grant of the exemption by the Committee was nevertheless against concerns raised during public participation including the discrimination of other airlines and the persistent financial constraints facing the airline long before the advent of the pandemic.
The Committee has however anchored the exemption request to cover the national carrier on subsidies extended to State linked carriers in other jurisdictions around the world.
This include the waiver of all landing and parking fees between April and December last year by the Seychelles government, Ksh.13.7 billion ($128 million) relief for tourism and air transport sectors in Senegal and the Ksh.1.2 trillion (9 billion Euro) bailout of Lufthansa by Germany.
The implementation of minimum tax on other enterprises meanwhile remains in limbo following a petition by the Isinya Sub-County Bar Owners Association who challenged the…