AFRAA’s Maureen Kahonge addresses Kenya’s proposed aviation taxes.
Kenya's aviation industry is raising alarm over proposed tax measures in the Finance Bill 2026, warning Parliament's Finance Committee that the changes could increase operating costs and weaken the country's aviation sector.
The African Airlines Association (AFRAA), the International Air Transport Association, the Kenya Association of Air Operators and Kenya Airways have jointly urged the committee to reverse provisions eliminating long-standing tax exemptions. These include VAT exemptions on aircraft, spare parts and navigational instruments, as well as Import Declaration Fee and Railway Development Levy exemptions on aviation goods, which currently add an additional 4.5% to import costs.
Maureen Kahonge, AFRAA’s director of commercial and communications, said on LinkedIn that she told the parliamentary committee “The message is clear: the Finance Bill 2026, as it stands, puts African aviation at risk.”
"Kenya's aviation sector contributes $3.3 billion to GDP and supports 460,000 jobs. It is the backbone of tourism, medical evacuation, humanitarian operations and trade across East Africa,” she said.
Under the proposed changes, Kenya would become the only country in the region imposing 16% VAT on aircraft leasing and maintenance—a move Kahonge warned would push MRO business and investment elsewhere. "We've already seen 74 aircraft deregistered as a direct consequence. Those are jobs, connections and opportunities lost."
She added that the opportunity cost of inaction is equally stark: reinstating the exemptions could grow aviation revenue from $3.3 billion to $6.5 billion, create more than 300,000 additional jobs, boost tourism receipts and unlock $220 million in fleet modernization investment.
Kahonge concluded: "African aviation deserves a policy environment that fuels growth, not one that grounds it."
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