Kenya Airways Exempted From Paying Minimum Tax

The National Treasury has gazetted the exemption of the ailing Kenya Airways from paying the minimum tax at a rate of 1 percent of their turnover.

“In exercise of the powers confirmed by section 13(2) of the Income Tax Act, the CS for National Treasury and Planning directs that the income derived from or accrued in Kenya by an airline in which the government of Kenya owns at least 45 percent of its shares, and the subsidiaries of that airline shall be exempted from the provisions of Section 12(d) of the Act,” said Ukur Yatani

The minimum tax was introduced in the Finance Bill 2020. “The intention of this is to bring onboard companies who earn income from Kenya, but end up declaring losses perpetually to avoid payment of corporate taxes,” Yatani explained.

In the recent financial results, the ailing Kenya Airways registered a whopping loss of 36.57 billion shillings for the 2020 financial year.

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According to CEO Allan Kilavuka, Kenya Airway’s passengers dropped significantly during the year under review to 1.8 million compared to 5.2 million in 2019, hitting hard on its revenue income. This was occasioned by the Covid-19 pandemic.

The drop in passenger volumes saw the total turnover shrink by 60 percent to 52 billion shillings. Cargo volumes also went down during the period, as the carrier grounded some flights, leading to reduced belly space. Kenya Airways’s basic loss per share jumped to 6.22 shillings in 2020 from 2.23 shillings in the prior year.

In February, the national carrier, Kenya Airways (KQ), freight division KQ Cargo, has announced the resumption of its cargo services to New Delhi. The first cargo flight to resume from New Delhi landed at Jomo Kenyatta International Airport (JKIA), on 21st February 2021, carrying pharmaceuticals, machinery, and general merchandise from New Delhi.