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Hi

I understand that the 2013 VAT Act was changed by Kenya's Value-added Tax (VAT)(Amendment) Act 2014 which exempted tour operators from VAT. Is this true?

VAT Amendment Act 2014

This came into effect on 29 May 2014 and expanded the list of goods and services that are exempt from VAT.

Its objective was to protect low income citizens from the rising prices of basic commodities as a result of the enactment of the VAT Act 2013.

The VAT (Amendment) Act 2014 also corrected some errors in the list of exempt supplies notably the VAT status of Airplanes and other aircraft as follows;
Agriculture

• Sugarcane


• Unprocessed produce of plant species camellia sinensis Made-up fishing nets of man-made textile material


• Milk and cream, neither concentrated nor containing added sugar or other sweetening matter of tariff nos:
  
  
  
  • 0401.10.00 – of a fat content, by weight, not exceeding 1%; and
  
  
  • 0401.20.00 – of a fat content, by weight, exceeding 1% but not exceeding 6%
  
  
  • Materials, waste, residues and by-products, whether or not in the form of pellets and preparations of a kind used in animal feeding
  
  
  • Unprocessed green tea
  
  
  
  

Health

• Mosquito nets


• Inputs or raw materials (either procured locally or imported) supplied to pharmaceutical manufacturers in Kenya for manufacturing of medicaments, as approved from time to time by the Cabinet Secretary for National Treasury in consultation with the Cabinet Secretary responsible for health.

Energy

• Specialized solar equipment and accessories, including solar water heaters and deep cycle-sealed batteries which exclusively use or store solar power.

Tourism

• Air ticketing services supplied by travel gents

• Deletion from the list of exempt supplies Food preparation specially prepared for infants, that were previously exempt are now taxable.

Correction of errors (exempt supplies)

• Matching the tariff number 8802.20.00 as per the East African Customs Common External Tariffs (EACCET) with the right description of airplanes and other aircraft.
  
  There was confusion among airline companies as to which particular airplanes were exempted since the tariff number and the description in the VAT Act, 2013 did not match with the description in EACCET. That has now been corrected and only airplanes and other aircraft, of un laden weight not exceeding 2,000kg are exempt.


• Deleting the word ”tax” appearing in item 30 immediately before the word ”supplies” and substituting with the word 'taxable'.
  This removes the ambiguity by clarifying that it is ”taxable supplies,” and not ”tax supplies” purchased or imported by licensed companies undertaking oil and mining activities that are exempt from VAT subject to the exemptions given in the Act.