National carrier, Kenya Airways has received a financial reprieve after it was exempted from paying the newly introduced 1% minimum tax of gross turnover, saving the cash-strapped airline hundreds of millions of shillings annually.
This follows a Kenya Gazette notice dated March 17, 2021, announced by Treasury Boss Ukur Yatani,
The exemption of the cash-tapped Pride of Africa from paying the minimum tax by the government is one big incentive the wingless bird has been waiting for as the nationalization process is ongoing. Kenya Airways has been posting perpetual losses for a period of time with the latest results a fortnight ago standing at Sh30 billion after-tax loss.
“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,” Mr. Yatani said in the notice.
The Treasury Secretary however didn’t quote Kenya Airways but the shareholding structure indicates that the government has 48% stake in the company thus automatically qualifies for the tax exemption.