Ruto scraps tax for the rich and politicians to import helicopters at a cheaper price
Rich Kenyans and politicians import helicopters at a cheaper price in President Ruto's tax plan in the financial bill 2023
Rich Kenyans and politicians import helicopters at a cheaper price in President Ruto’s tax plan in the financial bill 2023.
After President William Ruto’s administration proposed to eliminate three taxes on aircraft and parts, wealthy Kenyans and politicians will import helicopters and planes at lower prices.
This comes as the Treasury prepares to hit the low-income class with higher fuel and salary taxes to pay for the Sh3.59 trillion budget.
The government wants to eliminate the 3.5 percent import declaration fee (IDF) and the two percent Railway Development Levy (RDL) in addition to exempting importers of aircraft, particularly choppers, from paying the 16 percent Value Added Tax (VAT).
“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 Robert Waruiru, a partner in charge of tax and regulatory at Ichiban Tax & Business Advisory.
The tax cuts will come as a major boost to the aviation industry, which decried the re-introduction of these levies by the former administration of President Uhuru Kenyatta.
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But they may not sit well with thousands of middle-class workers whose payslips have come under the biggest attack as the new administration loads additional levies to fund an ambitious pension, healthcare, and housing plan.
Wealthy Kenyans, including politicians during elections, hire helicopters and spend between Sh150,000 to Sh400,000 per hour.
Importers of helicopters are now one of the biggest beneficiaries in the latest amendments after the Treasury Cabinet Secretary Njuguna Ndung’u proposed to have them placed under the exempt status for three levies.
In 2022, Kenya imported aircraft and related equipment valued at Sh15.1 billion down from Sh17.9 billion in 2021, as importers grappled with the high cost that had been compounded by the shortage of semiconductors.
The total number of aircraft registered last year dropped by 1.5 percent to 726 compared to 2021, data from the Economic Survey 2023 reveals.
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