National carrier Kenya Airways is set benefit massively after The Treasury removed value added tax (VAT) on importation of all aircraft spare parts.
This means that KQ will now have access to millions of shillings locked up in duty refunds from the taxman.
The Finance Bill,amended the 2013 VAT law which only exempted aircraft operators from paying the 16 per cent levy on some of about 400 types of spare parts.
“Any other aircraft spare parts imported by aircraft operators or persons engaged in the business of aircraft maintenance upon recommendation by the competent authority responsible for civil aviation,” the new amendment states.
KRA has stated that the clause is “meant to cover all (aircraft) spare parts not specifically covered in the VAT Act 2013.
KQ, which has posted losses over the last four years, has been lobbying to have all spare parts declared VAT free.