NAIROBI, KENYA – The International Air Transport Association (IATA) has issued a stark warning that Kenya's position as a leading African aviation hub is under threat from a growing burden of air travel taxes. In a statement released on Friday, November 7, 2025, the global airline body cautioned that recent fiscal measures could stifle economic growth, reduce connectivity, and make Kenya less competitive compared to regional rivals.

The warning follows President William Ruto's assent to the Air Passenger Service Charge (Amendment) Act on October 15, 2025. This new law increased the levy on international tickets by 25% from $40 to $50 (approximately KSh 6,500) and on domestic tickets by 20% from KSh 500 to KSh 600. This was the first such increase in over 13 years, with the government stating the additional revenue is necessary to fund key agencies including the Kenya Airports Authority (KAA), Kenya Civil Aviation Authority (KCAA), the Kenya Meteorological Service, and a consolidated Tourism Fund.

According to IATA's analysis, these charges contribute to making Kenya one of the more expensive countries for air travel in the region. An IATA report noted that in 2024, Kenya collected approximately $148 million (KSh 19.12 billion) in ticket tax revenue, with an average tax of $21.1 (KSh 2,726) per passenger. A broader study by the African Airlines Association (AFRAA) in September 2024 found that the average for taxes and fees for international departures in Eastern Africa was $63.30. While specific comparative rankings fluctuate, the sentiment from industry bodies is that Kenya's tax load is a significant concern.

Economic and Tourism Implications

The aviation sector is a critical pillar of Kenya's economy. A 2023 IATA report highlighted that the industry and its related supply chains contribute an estimated $3.3 billion (KSh 425 billion) to the nation's GDP, equivalent to 3.1%, and support around 460,000 jobs. Industry stakeholders fear that increasing the cost of travel could have a chilling effect on tourism, a vital source of foreign exchange.

The Kenya Association of Air Operators (KAAO) has been particularly vocal about the broader tax environment. Chairman Mbuvi Ngunze warned in May 2025 that the reintroduction of 16% VAT, Import Declaration Fees (IDF), and a Railway Development Levy (RDL) on aircraft and spare parts under the Finance Bill, 2025, would severely inflate operational costs. This, he argued, would make Kenyan airlines less competitive than regional counterparts in Ethiopia, Rwanda, and South Africa, which maintain tax exemptions to support their aviation sectors. The increased costs could lead to higher fares, reduced flight frequencies, and potentially deter investment in the sector.

Government's Justification and Regional Context

The Kenyan government has defended the tax increases as essential for self-reliant financing of critical infrastructure and services. When tabling the Air Passenger Service Charge bill, National Assembly Majority Leader Kimani Ichung'wah stated the goal was to ensure sustainable funding for key institutions and eliminate duplication of roles, particularly with the merger of tourism promotion funds. The inclusion of the meteorological service is intended to enhance flight safety through better weather forecasting.

However, these domestic priorities are unfolding in a competitive regional landscape. Across Africa, high government-imposed taxes and fees are a persistent challenge. The 2024 AFRAA study revealed that African passengers pay an average of $68 in taxes and fees per international ticket, more than double the average in Europe ($30) or the Middle East ($34). This heavy tax burden is widely seen by industry bodies like IATA and AFRAA as a primary obstacle to the growth of air travel and the successful implementation of initiatives like the Single African Air Transport Market (SAATM), which aims to liberalize the continent's skies.

As Kenya seeks to attract 3 million international tourists by the end of 2025, the balance between generating state revenue and maintaining the competitiveness of its vital aviation and tourism sectors remains a critical policy challenge. The warnings from IATA suggest that the current trajectory of rising taxes may jeopardize the very economic growth they are intended to support.