NAIROBI, KENYA - A new air passenger levy signed into law by President William Ruto risks jeopardizing Kenya's long-held status as a premier aviation hub in Africa, the International Air Transport Association (IATA) warned on Friday, November 7, 2025. The global airline trade body expressed concerns that the increased taxes will inflate travel costs, dampen demand, and erode the country's competitive edge in the region.

The criticism follows the enactment of the Air Passenger Service Charge (Amendment) Bill, 2025, which President Ruto signed into law on October 15, 2025. The new law increases the levy on domestic flights to KSh 600 and on international flights to US $50 (approximately KSh 6,500). This represents a 20% and 25% increase for domestic and international tickets, respectively, marking the first such adjustment in over 13 years.

Funding Infrastructure at a Cost

The Kenyan government has defended the tax hike as a necessary measure to generate sustainable funding for key state agencies. According to the legislation, sponsored by National Assembly Majority Leader Kimani Ichung'wah, the revenue will be distributed among the Kenya Airports Authority (KAA), the Kenya Civil Aviation Authority (KCAA), the Kenya Meteorological Service Authority, and a newly consolidated Tourism Fund. Officials argue the funds are critical for modernizing airport infrastructure, enhancing aviation safety, improving weather forecasting, and promoting tourism.

In a statement, Majority Leader Ichung'wah said the bill's intent was to ensure funds are shared in a way that “eliminates duplication and guarantees sustainable financing for key institutions.” The inclusion of the meteorological service is a strategic move to bolster flight safety and climate resilience.

Economic and Regional Implications

Despite the government's rationale, IATA's analysis highlights a significant economic risk. According to a recent report, Kenya already has some of the highest air travel taxes in Africa. In 2024, the country generated an estimated $148 million (KSh 19.12 billion) from ticket taxes, with an average tax of $21.1 (KSh 2,726) per passenger, placing it among the top 15 nations globally in this regard.

Aviation experts and local operators have echoed IATA's concerns. The Kenya Association of Air Operators (KAAO) had previously warned that other proposed taxes in the Finance Bill 2025, such as VAT on aircraft and spare parts, would significantly raise operating costs and deter investment. These cumulative levies could weaken Kenya's position against regional competitors like Ethiopia, Rwanda, and South Africa, who maintain tax exemptions to boost their aviation sectors.

Air transport is a crucial enabler of economic growth, particularly for tourism, trade, and business travel. The African Airlines Association (AFRAA) has noted that taxes and fees on the continent are, on average, more than double those in Europe and the Middle East, inhibiting the growth of air travel. In East Africa, taxes can constitute up to 30% of a ticket's price. With Nairobi's Jomo Kenyatta International Airport (JKIA) serving as a vital hub for connecting Africa to the world, increased costs could divert traffic to other airports, impacting not only airlines like Kenya Airways but also the broader economy.

A Balancing Act for Growth

The government faces a difficult balancing act. On one hand, there is a clear need to fund the development and maintenance of world-class aviation infrastructure to maintain safety and efficiency standards, such as the Category 1 safety rating that permits direct flights to the United States. On the other hand, over-taxation risks making the country an uncompetitive and expensive destination for both tourists and business travelers.

As the new levies take effect, the Kenyan public and the wider East African region will be watching closely to see whether the increased revenue translates into tangible improvements in services or if it will, as IATA fears, ground the country's ambitions of soaring as the undisputed aviation leader of Africa. Further investigation is required to ascertain the government's formal response to IATA's latest warning.