This archive report was first published on 7 July 2021.
Kenya's New Import Duty Rates: A Boost for Revenue, But a Burden for Small-Scale Traders ¶
As the 2022 general elections approach, the Kenyan government has introduced new import duty rates that will see helicopters and planes used by politicians subject to duty rates of up to 25%. This move is expected to generate billions in revenue for the government, but may also harm small-scale traders and make items unaffordable for the majority of citizens.
According to the newly sanctioned measures on import duty rates for externally-manufactured products entering the East African Community (EAC) region, the new tariffs were put in place to set in motion processes of local industrialization, encouraging local investments and promoting local production. The laws have been in effect since July 1, 2020.
Importers of choppers and planes will have to part with more cash, with the higher duty of 25 per cent that has been in place for one year now. This supersedes an initial common external tariff (CET) of zero per cent, with the National Treasury expecting to earn sizable revenue from the aircraft.
Chopper prices range between Ksh 200 million to over Ksh 1.5 billion for a single unit, with helicopters gobbling up to Ksh 30,000 worth of aviation gasoline per hour. Parking fees at Nairobi's Wilson Airport set owners back Ksh10,000 every 24 hours, while landing fees at the facility cost about Ksh1,000.
Kenya's aviation industry is reportedly experiencing consistent growth, with the Civil Aviation Authority (KCAA) moving to increase the runway distance of Malindi Airport by a length of 1,000 meters.
