Economy

Parliament probes use of air passenger tax collection

Travellers

A Kenya Airways ground crew checks-in passengers at the Jomo Kenyatta International Airport in Nairobi, on August 1, 2020. PHOTO | AFP

Parliament has started investigations into how collections from air passengers service tax were spent in the promotion of tourism in the country.

The Finance and National Planning committee wants the Kenya Airports Authority (KAA) to provide full disclosure of amounts collected and transmitted to the Tourism Promotion Fund (TPF) to support the development and promotion of the tourism sector.

Section 3 of the Air Passenger Service Charge Act imposes a service charge on passengers departing by air from an airport within Kenya.

The government in 2016 increased charges for domestic travel from Sh500 to Sh600 while external transport was raised from Sh5,000, up from Sh4,000.

The Treasury had in the 2016 budget proposed a special tourism promotion fund supported by an increment in the air passenger service charge.

The Air Passenger Service Charge Act affects anyone departing by plane from an airport within Kenya and for connection.

It pegs tax on tickets purchased with variance based on whether they are for the internal or external journey.

“Subject to this Act, there shall be paid by every person who purchases a ticket for an external or internal journey an air passenger service charge of Sh440 ($40) or the equivalent in specified currency or in Kenya shillings for an external journey and five hundred shillings for an internal journey,” the law states.

The investigations by the committee follows a request for a ministerial statement filed by Luanda MP Christopher Omulele.

The main source of the fund is proceeds realised under air passenger service charge which is collected by the KAA.

“It is not clear the total amount of funds so far collected by KAA and activities funded...The committee should provide full disclosure detailing proceeds collected.”