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EAC seeks tax waivers for Covid-19-ravaged airlines

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LUKE ANAMI

By LUKE ANAMI
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One of the pressing issues that was to be addressed at the cancelled EAC Heads of State Summit a fortnight ago, was the survival of the region’s national carriers.

Private sector players under the umbrella of the East African Business Council in a paper titled EABC Position Paper on Facilitating Air Cargo Operations in the EAC Region During Covid-19 Outbreak, are seeking tax waivers for regional carriers to enable them continue operating cargo flights to freight fresh produce to international markets.

These include a reduction in operating costs; suspension of landing, navigation and parking fees charge; suspension of excise duty on aviation fuel, and exemption from Covid-19-related fees.

“EABC recommends that the EAC Heads of State Summit considers the following to encourage imports by air; that the EAC Partner States waive all import duties and VAT by air during the Covid-19 crisis,” said Dr Peter Mathuki, the EABC chief executive.

The long-term effect of this is to increase inter-regional air transport traffic and frequencies by 41 per cent and reduce flight time.

It will also reduce air transport cost for both passenger and cargo by 10 per cent as well as create an additional 46,320 jobs and generate $202.1 million per annum in the GDP for the partner states post-pandemic.

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“Due to the global demand and supply disruptions of fresh produce, the cost of air freight in EAC has escalated, making the region’s export produce uncompetitive,” said Dr Mathuki.

In Kenya, for instance the volume of fresh produce out of JKIA has reduced from a weekly 5,000 tonnes to 1,300 tonnes, a 75 per cent decline with a similar trend reported across the region.

Boxed in by lack of funds and a crisis whose end is unknown, fresh produce producers in the region had since the Covid-19-induced global shut down, been pushing for more fresh produce cargo flights as competition for cargo on the few available international flights pushed cargo prices out of reach.

Airfreight charges to the markets abroad in recent weeks have ranged from $3 and $7 per kilo up from an average of $1.50 and $2.50 per kilo.

But Tanzanian exporters had already been squeezed out of the JKIA by exorbitant cargo fees and limited space, and the EABC move was coming after they found alternative ways.

Through the Tanzania Horticultural Association they had already struck a deal with Ethiopian Airlines to airlift its horticulture produce from the Kilimanjaro International Airport twice a week.

Kenya, whose cargo was being freighted by KLM, brought on Ethiopian too to increase capacity at JKIA.



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