Kenyan Airways (KQ) which is the flag carrier airline of Kenya has been exempted by the National Treasury from paying the minimum tax set at 1 percent of Gross Turnover.
What this means is that it will now be possible for Kenya Airways (KQ) to only pay income taxes once it returns to profitability in the future.
The tax exemption will in addition be extended to the subsidiaries of Kenya Airways including its more affordable carrier; Jambojet.
The minimum tax which was introduced on the 1st of January 2021, will be paid if a company’s normal corporate taxes go below 1 percent of its gross revenue. It is expected that this will ensure that companies which are incurring major losses will still be able to contribute to the National Treasury.
According to Business Daily Africa the National Treasury Cabinet Secretary; Ukur Yatani stated that, “In exercise of the powers confirmed by section 13(2) of the Income Tax Act, the CS for National Treasury and Planning directs that the income derived from or accrued in Kenya by an airline in which the government owns at least 45% of its shares, and the subsidiaries of that airline, shall be exempted from the provisions of Section 12(d) of the Act.”
Kenya Airways without the exemption, would have made its very first minimum tax payment by the 20th of April 2021. The first minimum tax payment would have covered the first 3 months of its current financial year.
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