Economy

State earns Sh3bn from air travellers departure tax

jkia

Jomo Kenyatta International Airport. PHOTO | JEFF ANGOTE | NMG

Departure tax earned the Tourism Promotion Fund (TPF) Sh2.9 billion from local and international passengers in the nine months to January this year.

Tourism Cabinet Secretary Najib Balala said Kenya Airports Authority (KAA) remitted Sh2.17 billion ($19,962,719.44) from the international air levy charge. KAA also remitted Sh812,320,410 from the domestic air levy charge to the TPF revenue account.

TPF was operationalised in 2019 for tourism development, promotion and branding.

The Treasury in 2016 proposed in the budget statement to increase the air passenger service charges from $40 to $50 and from Sh500 to Sh600 for external and internal travel respectively.

The revenue realised is used exclusively for the development, promotion and branding of tourism in Kenya.

The levies are apportioned among the Kenya Airports Authority, the Kenya Civil Aviation Authority (KCAA) and the Tourism Promotion Fund (TPF).

“In the case of charge collected under international passenger charge, 60 percent thereof to the Kenya Airports Authority, 20 percent to the Kenya Civil Aviation Authority (KCAA) and 20 percent to the TPF.

“In case of the charge collected under domestic passenger charge, 50 percent thereof to the KAA, 30 percent to the KCAA and 20 percent to the TPF,” Mr Balala told the Finance committee.

Mr Balala said out of the $50 charged to every international passenger as departure tax, $10 is apportioned to the TPF and out of Sh600 charged for every domestic passenger as departure tax, Sh120 is apportioned to the TPF.

He said the apportionment order 2018 came into effect in the financial year 2018/19 where the proceeds realised for the TPF was Sh2,483,161,000.

“The fund had accrued $19,962,719 equivalent to Sh2,175,936,418 as collection from international departure tax and Sh812,320,410 from February 2020 to January 28, 2022 (23 months),” Mr Balala said.

Mr Balala said the TPF has not invested any funds following the decline of the estimated and expected revenue due to the Covid-19 pandemic.

He said the projects prioritised for funding in the year 2020/21 include the ongoing construction of the Ronal Ngala Utalii Collect at a cost of Sh1.5 billion.

“The other projects were two strategic interventions projects that required urgent funding, among them the development of the new vision tourism post-Covid-19 strategy and mitigation and afforestation of Tsavo National Park following the fire outbreak in Tsavo National Park,” Mr Balala said.

The Tourism Promotion Fund spent Sh300 million to revitalise and revamp the Nairobi National Park. The rehabilitation included the upgrading of roads at the park.

TPF also spent Sh35 million to develop the new Tourism Vision Strategy 2021 and Sh30 million to mitigate and reforestation of Tsavo National Park through the Kenya Wildlife Service.

[email protected]