KQ, Japanese firms get MPs’ nod to forego tax payments
RELIEF: Members of the National Assembly yesterday exempted Kenya Airway (KQ) and its subsidiaries from paying minimum taxes to allow the company to continue with its operations until it returns to profitability.
The legislators also approved a request to have Japanese companies, consultants and employees involved in the implementation of 16 projects countrywide exempted from paying income tax.
During the sittings, the MPs acceded to a request by the Committee on Delegated Legislation, chaired by Tiaty MP Kassait Kamket, that sought the approval of Legal Notice No. 27 of 2021 from the National Treasury seeking to exempt “an airline in which the government of Kenya owes at least 45 per cent of its shares and the subsidiaries of the airline” from the minimum tax imposed under section 12(d) of the income tax Act.
KQ’s subsidiaries set to benefit from the exemptions include Kenya Air Freight Handling which deals with Cargo handling for perishable products which KQ has 51 per cent shareholding, Jambojet, African Cargo Handling Ltd, dormant Kencargo Airlines International Ltd and Fahari Aviation Ltd that deals with drone and emerging technologies in the aviation sector.
The legislators who included Leader of Majority Amos Kimunya and George Murugara (Tharaka) said there is a need to exempt KQ from taxes to enable it continues with its operations.
Kimunya said KQ ought to be helped as it is a critical factor in supporting the economy, and once it dies all other businesses supporting the economy including tourism, agriculture would also collapse.
Murugara said as a member of the delegated legislation they agreed to the request to have it exempted as the airline is sustaining the economy of the country.
“We agreed to the request because we are aware that KQ plays a critical role in the government and the aviation industry,” he added.