The government is targeting some of the billions that could be used to import helicopters ahead of the 2022 election amid a series of tax measures targeting a wide range of consumer products.
This was revealed in the new approved measures on import duty rates for goods entering the East African Community (EAC) region.
In addition to planes, Kenya is attacking imported sports and leather shoes, gas cylinders, suitcases, new clothes and all soaps in a bid to protect local industries, but which could also harm businesses. small traders and make items unaffordable for the majority of citizens.
For the second year in a row, importers of helicopters and airplanes will have to pay a 25 percent higher tariff over the zero percent Common External Tariff (CET) as the National Treasury expects to reap good revenues of the Machines.
Politicians usually take to the skies as they travel across the country to popularize themselves.
In 2019, Kenya imported planes, helicopters and spacecraft worth $ 178 million (19.2 billion shillings), mostly from Ireland, the United States and Canada, according to an analysis data from the Observatory Economic Complexity (OEC), which is led by the MIT Media Lab.
However, it is the tax on basic necessities that is likely to stir up the storm.
After slapping cooking gas with 16 percent VAT, the government added a 25 percent duty on TEC’s zero percent LPG cylinders, aimed at helping local manufacturers.
For Italian shoe enthusiasts, the government will levy a 25 percent duty on imported leather clothing or $ 2.5 (270 shillings) per pair, whichever is greater.
It will be the same for sandals and flip flops as well as sports shoes. New clothing will be imported at a higher tariff of 35 percent instead of 25 percent.
Chewing gum, candy, butters and other fats will be imported at a rate of 30 percent to 25 percent.
However, the government has decided to spare the rice, which will be imported at a rate of 35 percent or $ 250 (Sh 27,000) per tonne as opposed to the standard rate of 75 percent or $ 345 (Sh 37,260).
This is news that will not be welcomed by Kenyan farmers, as the country derives most of its rice from Pakistan – which is also the largest buyer of Kenyan tea.
In addition, demand for rice exceeds the country’s local production, which has enabled Kenya to fill the void through imports.
Import duties have been a lucrative source of revenue for the government, with the tax official playing a vital role in Kenya’s tax administration, exceeding his target in the fiscal year ended June 2021.
The numbers have increased
Data from the Kenya Civil Aviation Authority (KCAA), the body that registers aircraft in the country and certifies aviation professionals, shows that the number of helicopters has increased in the run-up to general elections.
KCAA chief executive Gilbert Kibe said 67 helicopters had been registered in the three years leading up to 2020.
Last year, 40 helicopters were registered compared to 24 and 17 in the previous two years.
“By election time I’m sure they’ll be over 100,” said Captain Kibe in an interview with The standard.
Peak registration, he said, begins about a year to six months before the election.
“But that’s for a limited period… about six months before the election or at most a year. If the elections take place in August (2022), we expect the numbers to start increasing from August of this year, ”he said.
In April last year, Cabinet Secretary of the National Treasury Ukur Yatani noted that while helicopters and parts were exempt from tax, there were few significant benefits for ordinary citizens.
Helicopters and planes were exempt from taxes as they were essential for humanitarian work, most of them used to transport food and medicine to remote areas of the country.
“You buy an engine for an airplane, we don’t charge taxes. And if you ask how the regular mwananchi is going to benefit, it’s not so much, ”Yatani said.
In 2020, the government also imposed a value added tax (VAT) and import declaration fee (IDF) on the rental or leasing of certain types of helicopters and other aircraft.
The tax authorities collected 1,669 billion shillings.
This represented a performance rate of 103 percent, or a surplus of 18.2 billion shillings.