Report On The Air Passenger Service Charge (amendment) Bill (national Assembly Bill No. 35 Of 2025)

REPUBLICOFKENYA THENATIONALASSEMBLY

THIRTEENTHPARLIAMENT-FOURTHSESSION-2025

DEPARTMENTALCOMMITTEEONTRANSPORTANDINFRASTRUCTURE

REPORTON:

THECONSIDERATIONOFTHEAIRPASSENGERSERVICECHARGE (AMENDMENT)BILL(NATIONALASSEMBLYBILLNO.35OF2025)

DirectorateofDepartmental Committees

Clerk'sChambers Parliament Buildings NAIROBI

THE NATIONAL ASSEMBLY PAOTDSLAID

DATE:

AUGUST,2025

14 AUG 2025

TABLED 18

DE-TABLE:

DAY.

Hm(Gmne"

ChaneSsor

Clepkorsa

(Qnheha)

TABLE OF CONTENTS

| ABBREVIATIONS.. | ABBREVIATIONS.. | | |-----------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|------| | LISTOFANNEXURES.. | LISTOFANNEXURES.. | | | I.0PREFACE.. | I.0PREFACE.. | 6 | | 1.1 | IntroductionandCommitteeMandate | | | 1.2 7 | CommitteeSubjectsandOversight | | | 1.3 8 | CommitteeMembership | | | 1.4 | Secretariat | | | 9 CHAPTERTWO | 9 CHAPTERTWO | 10 | | 2.0 | BACKGROUND. | .10 | | 2.1 | Introduction. | 10 | | 2.2 | OverviewoftheBill. | 10 | | | 2.3 Situational analysis... | | | CHAPTER THREE | CHAPTER THREE | 14 | | 3.0 | PUBLICPARTICIPATION/STAKEHOLDERENGAGEMENT | 14 | | 5.ISubmissionby theMinistryofRoadsandTransport.. | 5.ISubmissionby theMinistryofRoadsandTransport.. | .14 | | 3.2 Submission bytheMinistry of Environment,Climate Change and Forestry....... 15 | 3.2 Submission bytheMinistry of Environment,Climate Change and Forestry....... 15 | | | 3.3Submissionby theMinistry of Tourism andWildlife. | 3.3Submissionby theMinistry of Tourism andWildlife. | ..16 | | 3.4Submission by theKenya Civil AviationAuthority(KCAA).. | 3.4Submission by theKenya Civil AviationAuthority(KCAA).. | .19 | | 3.5SubmissionbyKenyaAirways... | 3.5SubmissionbyKenyaAirways... | .20 | | CHAPTERFOUR | CHAPTERFOUR | 24 | | 4.0 | COMMITTEEOBSERVATIONS. | 24 | | CHAPTERFIVE | CHAPTERFIVE | 25 | | 5.0 | COMMITTEERECOMMENDATION. | .25 |

ABBREVIATIONS

AAID

• Aircraft Accident Investigation Department

APSC

• Air Passenger Service Charge

ICAO

• International Civil Aviation Organization

KAA

• Kenya Airports Authority

KCAA

• Kenya Civil Aviation Authority

KMD

• Kenya Meteorological Department

KMSA

• Kenya Meteorological Service Authority

TF

• Tourism Fund

TPF

• Tourism Promotion Fund

WMO

-World Meteorological Organization

LISTOFANNEXURES

AnnexureI:Signedlistof Memberswho attended thesitting that considered and adopted the report.

Annexure 2: Minutes of the Committee on sittings considering the Bill and adoption of the report

Annexure 3: Copy of the Air Passenger Charge (Amendment) Bill, 2025.

Annexure 4: Correspondence to stakeholders requesting for submission of Comments.

Annexure 5: Newspaper advertisement inviting the public to submit memoranda on the Bill.

Annexure6:WrittensubmissionsfromStakeholders.

CHAIRPERSON'SFOREWORD

The Air Passenger Service Charge (Amendment) Bill (National Assembly Bill No. 35 of 2025) CommitteeonTransportandInfrastructureforconsiderationandreporting totheHouse pursuant to the National Assembly Standing Order I27(1).

While conducting public participation, the Committee placed advertisements in the print media on 6th August, 2025, seeking comments from the public on the Bill pursuant to the provisions of Article Il8 of the Constitution and Standing Order I27(3). The Committee also invited relevant stakeholders, namely the Ministry of Roads and Transport; the Ministry of Environment, Climate Change and Forestry and the Ministry of Tourism and Wildlife.Their submissions are included in this report.

TheCommitteeisgratefultotheOfficesoftheSpeakerandtheClerkoftheNational Assembly for the logistical and technical support accorded to it during the consideration of the Bill. I wish to express my appreciation to the Committee Members and the Committee Secretariatfor theirresilienceanddevotion toduty,whichmadetheconsiderationoftheBill successful.Finally,IwishtoexpressgratitudetotheMembersofthepublicwhosubmittedtheir views and comments on the Bill in the course of public participation. Their views and commentsindeedwerevitalintheconsiderationoftheBill

On behalf of the Committee and pursuant to the provisions of Standing Order 199 (6), it is my pleasantprivilege and honor to present to this House the report of the Committee on its No.35of2025).

HON.GKGEORGEKARIUKI,CBS,MP CHAIRPERSON

1.0 PREFACE

1.1 Introductionand CommitteeMandate

1. The Departmental Committee on Transport and Infrastructure is established under the NationalAssembly yStanding Orders No. 2l6 (1). The functions and mandate of the Committee as per Standing Orders, No.216(5) include: -

• a) To investigate, inquire into, and report on all matters relating to the mandate, management, activities, administration, operations and estimates of the assigned ministries and departments;

3. effectivenessoftheirimplementation;

• c) To study andreview all the legislationreferred to it;

5. d)To study, access and analyse the relative success of the Ministries and departments as measured by the results obtained as compared with theirstated objectives; 6. e)To investigate and inquire into all matters relating to the assigned Ministries and s p ss se m House; 7. National Assembly to approve, except those under Standing Order No.204 (Committee on appointments);

• g) To make reports and recommendations to the House as often as possible, including recommendation of proposed legislation;
• h) To consider reports of Commissions and Independent Offices submitted to the House pursuant to the provisions of Article 254 of the Constitution; and
• i) To examine any questions raised by Members on a matter within its mandate.

11. j)Toexamine treaties,agreements and conventions; 12. 2.The subject matter of the Departmental Committee on Transport and Infrastructure are stated in the Second Schedule of the National Assembly Standing Orders as follows: marine transport,seaports andnational integrated infrastructurepolicies andprogrammes and transport safety.

CHAPTERI

1.2 Committee Subjects and Oversight

3. The Committee is mandated to consider the following subjects as per the Second Schedule of theStandingOrders: 2. (i) Transport, including non-motorized transport; 3. (ii) Construction andmaintenanceofroads; 4. (ii) Rails, air and marine transport; Seaports and national integrated infrastructure 5. (iv) policies and 6. (v) programmes; and 7. (vi) Transport safety. 4. The Committee oversights the Ministry of Roads and Transport which has three (3) State Departments namely:

• i) TheStateDepartmentforRoads;
• i) TheStateDepartmentforTransport;and

11. ii)The State Department for Aviation and Aerospace Development. 5. Further, Committee oversights the State Department for Shipping and Maritime Affairs which is under the Ministry of Mining, Blue Economy, and Maritime Affairs.

1.3Committee Membership

6. The Committee comprises the following Members:

The Hon.G.K. George Kariuki, CBS,M.P- Chairperson Ndia Constituency United DemocraticAlliance Party

The Hon.Mutua Didmus Wekesa Barasa,M.P-Vice- Chairperson Kimilili Constituency

United DemocraticAllianceParty

The Hon.Arama Samuel. M.P Nakuru Town West Constituency Jubilee Party

The Hon.Abdul Rahim Dawood, M.P. North Imenti Constituency Independent

The Hon. Naicca, Johnson Manya, CBS, M.P Mumias West Constituency

Orange Democratic Movement Party

The Hon.Elsie Muhanda, M.P. Kakamega County

Orange Democratic MovementParty

The Hon. Francis, Kajwang' Tom Joseph, CBS,MP

Ruaraka Constituency

Orange Democratic Movement Party

The Hon. Chege John Kiragu, M.P.

Limuru Constituency United DemocraticAllianceParty

The Hon. Kiaraho, David Njuguna, M.P. Ol Kalao Constituency

Jubilee Party The Hon.Kiunjuri Festus Mwangi, M.P. Laikipia East Constituency The Service Party The Hon. Bady, Bady Twalib, M.P. Jomvu Constituency

OrangeDemocraticMovementParty

The Hon.Abdirahman,Husseinweytan Mohamed,M.P. Mandera East Constituency

OrangeDemocraticMovementParty

The Hon. Komingoi Kibet Kirui, M.P. Bureti Constituency

UnitedDemocraticAllianceParty

The Hon. Saney Ibrahim Abdi, M.P Wajir North Constituency United Democratic Alliance Party

The Hon. Jhanda Zaheer, M.P Nyaribari Chache Constituency

UnitedDemocraticAlliance

1.4 Secretariat

• 7.Thefollowing Members of Staff service the Committee:

Head of Secretariat Ms.TracyChebetKoskei Principal ClerkAssistantIl

Mr.Mohamednur M.Abdullahi

Ms. Clare Chopper Doye

Clerk Assistant

Clerk Assistant

Mr. Abdinasir Y. Moge

Mr.ErickKariuki

Fiscal Analyst

Research Officer

Ms.Faith Makena

Ms.Patricia Gichane

Serjeant-at-Arms II

Legal Counsel

Ms. Rinha Saineye

Mr. Danton Kimutai

MediaRelationsOfficer

Audio Officer

2.0 BACKGROUND

2.1Introduction

8. The Air Passenger Service Charge (Amendment) Bill (National Assembly Bill No. 35 of 2025) is sponsored by Hon. Kimani Ichung'wah, EGH, M.P, the Leader of the Majority Party. The principal object of the Bill is to amend the Air Passenger Service Charge Act, Cap. 475, to provide for the allocation of proceeds derived from the air passenger service charge to the Tourism Fund, the Kenya Meteorological Service Authority, in addition to the Kenya Airports Authority and the Kenya Civil Aviation Authority. 9. The Bill seeks to reallocate the proceeds designated to the Tourism Promotion Fund to the Tourism Fund established under the Tourism Act (Cap 38l). To limit duplication of roles, improve efficiency and enable the Government to support the financing of tourism-related projectsfrom a single source. 10. The Bill also allocates proceeds to the Kenya Meteorological Service Authority to finance its key functions and responsibilities and thereby deliver on its statutory mandate efficiently and effectively.

2.2OverviewoftheBill

I1.TheBill contains3 Clausesforconsideration:

• I)Clause I of the Bill provides for the short title.
• 2)Clause 2 of the Bill amends section 3 of the Air Passenger Service Charge Act, Cap. 475, to provide for the allocation of proceeds derived from the air passenger service charge to the Tourism Board, the Kenya Meteorological Service Authority, in addition to the Kenya Airports Authority and the Kenya Civil Aviation Authority.
• Clause 3 of theBillprovides for the amendment of the TourismAct, Cap. 38lto reallocate the proceeds designated to the Tourism Promotion Fund to the Tourism Fund.

CHAPTERTWO

2.3 Situational analysis

i.Air Passenger Service Charge Act (Cap. 475)

12. The Air Passenger Service Charge Act (Cap. 475) commenced on 20th November, 1970 and has subsequently been amended twenty-four times to date. The Act provides for the within Kenya. 2. 13.Section 3 of the Act provides that there shall be paid by every person who purchases a ticket for an external or internal journey an air passenger service charge of— 3. (a) fifty United States dollars or the equivalent in specified currency or in Kenya shillings for an external journey: and 4. (b) six hundred shillings for an internal journey. 14. The Act empowers the Cabinet Secretary to vary the charges specified by notice in the Gazette,from time to time. 6. 15.Further, the Act provides that all proceeds of the charge imposed under this section shall be apportioned between the Kenya Airports Authority, the Kenya Civil Aviation Authority and the Tourism Promotion Fund in such manner as the Cabinet Secretary may,by notice in the Gazette, specify.

ii. The Air Passenger Service Charge (Apportionment) Order (Legal Notice I43of2018,RevisedbyLegalNotice221of2023on31December2022)

• theproceeds ofthe airpassenger service charge among theKenya AirportsAuthority,the Kenya Civil Aviation Authority and the Tourism Promotion Fund as follows' (as revised on 3I" December 2022).
• (a)In the case of fiftyUnitedStates dollars or the equivalent inspecified currency or in Kenya shillings for an external journey (International Departures)
• ·Sixty percent (60%) to Kenya Airports Authority;
• ·Twenty percent (20%) to Kenya Civil Aviation Authority; and
• ·Twenty percent (20%) to Tourism Promotion Fund
• (b) In the case of six hundred shillings for an internal journey (Domestic Departures)
• ·Fifty percent (50%) to Kenya Airports Authority;

• Thirty percent (30%) to Kenya Civil Aviation Authority; and
• Twenty percent (20%) to Tourism Promotion Fund

ili.Statistics onDomesticand International Departures

17. TableTwo belowportrays the number of domestic and international passenger departures asextractedfromtheKenya National Bureauof Statistics"EconomicSurvey2025"

| Table 2: Domestic and International Departures from Kenyan Airports | Table 2: Domestic and International Departures from Kenyan Airports | Table 2: Domestic and International Departures from Kenyan Airports | |-----------------------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------| | Year | DomesticDepartures | International Departures | | 2020 | 1,147,000 | 751,300 | | 2021 | 1,913,100 | 1,316,900 | | 2022 | 2,524,000 | 2,513,500 | | 2023 | 2,648,900 | 3,326,500 | | 2024 | 2,647,500 | 3,645,400 |

Source:Economicsurvey2025

iv.Reallocation of proceeds of Air passenger charges from Tourism Promotion Fund to theTourismFund

• 18.In January 2025, the Cabinet approved recommendations aimed at reforming State Corporations through measures that streamline government operations, reduce waste, and curb excesses. The reforms are aimed at addressing operational and financial inefficiencies, enhancing service delivery, and reducing reliance on the Exchequer.

19. The reforms include merging 42 State Corporations with overlapping or related mandates into 20 entities to improve operational efficiency and eliminate redundancy. In the proposed reforms,theTourismPromotionFund andtheTourismFundwereearmarked for mergerinto asingleentity. 20. This Amendment aims to reallocate the proceeds designated initially for the Tourism Promotion Fund (TPF) to the Tourism Fund established under the Tourism Act (CAP. 381). This adjustment is intended to align with the executive's aspirations regarding State Corporations reforms.

v.Allocation of proceeds of Air Passenger charges to the Kenya Meteorological Service

21. The World Meteorological Organization documents that meteorological information is crucial for the safe, efficient, economical and environmentally friendly operation of civil aviation.Weatherinformationhelps tomakeinformeddecisionsabout:Safety;Flight schedules; flight planning; Air traffic management; and Airport operations. 22. National meteorological services and other designated agencies worldwide are responsible for providing a wide range of meteorological services, including observations, forecasts and warnings totheAviation industry. 23. The International Civil Aviation Organisation (ICAO) establishes international standards and recommended practices for aeronautical meteorology,emphasising the importance of accurateweather informationforflightplanning andoperations. 4. 24.The Kenya MeteorologicalDepartment(KMD)provides meteorological services to the Kenya Civil Aviation Authority.The Aeronautical Meteorology Division of the Kenya both national and international air navigation. KMD provides accurate, real-time operators. 5. objective of meteorological service shall be to contribute towards the safety, regularity and efficiency of air navigation. 6. 26.Further,the regulations provide that the objective of meteorological services shall be achievedbysupplyingthefollowinguserswiththemeteorological informationnecessaryfor the performance of their respective functions; 7. (a) air operators and flight crew members; 8. (b) air traffic services units; 9. (c)search andrescueservices units; 10. (d) airport management; and 11. p se d o ()s

CHAPTERTHREE

3.0PUBLICPARTICIPATION/STAKEHOLDERENGAGEMENT

• 27.To undertake public participation in the Constitution and Standard Orders, an Advertisement inviting the public to submit memoranda on the Bill was published in the newspaperonWednesday,6tAugust2025.TheCommitteealsoinvitedcommentsonthe Bill from relevant stakeholders namely; the Ministry of Roads and Transport vide a letter Ref:NA/DDC/T&l/2025/065dated7thAugust2025;theMinistryof Environment,Climate Change and Forestry vide a letter Ref:NA/DDC/T&l/2025/068 dated 7th August 2025 and the Ministry of WWildlife and Tourism vide a letter Ref: NA/DDC/T&l/2025/067 dated 7th August 2025.
• 28.TheCommitteereceivedsubmissionsfrom thefollowingstakeholders:
• a) The Ministry of Roads and Transport;
• b) The Ministry of Environment, Climate Change and Forestry;
• The Ministry of Tourism andWildlife;
• (P Kenya Civil Aviation Authority (KCAA); and
• e) Kenya Airways
• 29.The submissions of the stakeholders are outlined below:
• 3.I Submission by the Ministry of Roads and Transport

30. The Ministry of Roads and Transport made submissions to the Committee vide a letter dated13thAugust2025.

• s sd s e e soe oe ip ssd a s e so This charge is intended to generate revenue for the Kenya Airports Authority, Kenya Civil AviationAuthority,and the TourismPromotionFund.

32. The Ministry further submitted that it supports the Air Passenger Service Charge (Amendment) Bill (National Assembly Bill No. 35 of 2025 which seeks to replace the TourismPromotionFund with theTourismFund established under the TourismAct(Cap. 381) and adds the Kenya Meteorological Service Authority (KMSA) as a new beneficiary to thecharge. 33. The Ministry noted that the primary objective of the Bill is to eliminate duplication by consolidating tourism funding under a single Tourism Fund, thereby improving efficiency and funding stream to effectively fulfil its critical statutory mandate.

Parliament (Tourism Act Cap.38l) as compared to Tourism Promotion Fund established through a Legal Notice under Public Finance and Management (Tourism Promotion Fund Regulations) Act.

35. This also guarantees continuity as the Tourism Promotion Fund regulations have provision forreviewandorwindingofthefundaftertenyears. 36. in their submission, proposed an amendment to the Bill to also include the Aircraft Accident Investigation Department (AAiD) in the current Air Passenger Service Charge revenuesharingarrangement. 3. 37.Theyjustifiedtheneedfortheamendmentas therewasaneedforbothoperationaland financialindependence of theAAiDtoensurecredibleandtimelyinvestigationsand guarantee the financial independence of AAlD.Further, the proposal aligns with these requirements and reinforces AAID's autonomy given its critical role in the aviation ecosystem.

3.2 Submission by the Ministry of Environment, Climate Change and Forestry

• a letterRef:MEF/ADM/16VIL.XIIdated8thAugust2025statedasfollows;
• Kenya Meteorological Service Authority (KMSA)to deliver safety-critical aeronautical meteorological services in accordance withKenya's obligations under the Convention on International Civil Aviation, ICAO Annex 3, and World Meteorological Organization (WMO)standards.

40. The Ministry stated that Meteorological services constitute an indispensable component of civilaviation,providing the scientific basis for safe,regular,and efficient operations of aircraft. By furnishing timely and accurate forecasts, warnings, and real-time weather observations,these services enable pilots,air traffic controllers,and airline operators to anticipate and avoid hazards such as thunderstorms, turbulence, wind shear, icing, volcanic undertheConventiononInternationalCivil AviationandthestandardsprescribedinICAO Annex 3, which mandate the provision of meteorological information in support of international airnavigation. 41. In addition to enhancing safety, meteorological services underpin. operational efficiency in the aviation sector. By facilitating optimal flight planning, route selection, and altitude profiling, these services contribute to fuel savings, reduced maintenance costs, and during adverse weather,thus minimising delays and economic losses. The strategic integrationofmeteorologicalservicesintoaviationoperations ensures thatKenya'sair transport system remains safe,competitive,resilient,and capable of meeting the highest

international standards, while safeguarding passengers, crew, and national economic interests.

42. The Ministry observed that the only beneficiaries recognised under the current Air Passenger Service Charge Act (Cap. 475) are the Kenya Airports Authority (KAA), the Kenya Civil Aviation Authority (KCAA), and the Tourism Promotion Fund. The Ministry therefore proposed that the Kenya Meteorological Service Authority be included as a statutory beneficiary in the proposed amendment and that the allocation be clearly defined. responsibilities and functions and thereby deliver on its statutory mandate efficiently and effectively. 43. The Ministry proposed the following amendment to the Kenya Airports Authority Act No. 3 of 1991:

Part Ill -Functions and Powers of the Authority, Section I7c (b)to read that "Monies for the expenditure of the Kenya Civil Aviation Authority, Kenya Meteorological Service Authority, and Tourism Fund in accordance with section 3(3) of the Air Passenger Service Charge Act."

Justification

44. This will align the Kenya Airports Authority Act No. 3 of 199l, Section 17c (b) with the proposed AirPassengerService Charge(Amendment) Bill, 2025.

CommitteeObservation

The Committee rejected this proposal as it is beyond the scope of the Bill

3.3Submissionby theMinistryofTourismandWildlife

• 45.TheMinistry of Tourism andWildlifemadewrittensubmissions,videlettersRef:MT/I/24 dated12"hAugust2025andRef.MT/1/24dated 13thAugust,2024,stated as follows;
• 46.TheMinistryexpressedits concurrencewith theproposed amendmentstoSection3of the AirPassengerServiceChargeActand theconsequential amendmenttoSection66(2)of the TourismAct,Cap.38l,stating that thiswasinenhancementof theWhole-of-Government approach and in pursuit of the Bottom-Up Transformation Agenda.

47. The Ministry further proposed the following additional consequential amendments to the Tourism Act, Cap 38l;

• (a)Amend section68(a)to read"Finance the development of tourism products, services, programs,activities,events andpromotion and branding ofthe tourism sector.

Justification

• 48.The amendment seeks toexpand the scope of activities that the Tourism Fund can finance.

CommitteeObservation

49. The Committee rejected this proposal as it is beyond the scope of the Bill. 2. (b) Insert section 68 (h) immediately after 68 (g) to read "Monitor and evaluate programmes, projects and initiativesfunded by the Fund".

Justification

50. The proposed amendment seeks to create a new paragraph (h) that widens the scope of utilisationof theTourismFund to includemonitoring and evaluation ofprojects financed by the fund.

Committeeobservation

51. The Committee rejected this proposal as it is beyond the scope of the Bill. 2. act,receive and administerproceeds apportioned by section 3of the air passenger service charge act.

Justification

52. The proposed amendment seeks to extend the mandate of the Board of Trustees of the charge apportioned.

Committeeobservation

53. The Committee rejects the amendment as the Board of Trustees of the Tourism Fund is already vested with the mandate to operate and manage the Tourism fund under Section 66 (l1) of the Act. Therefore, the Board can receive and administer the funds apportioned from 2. the air passenger service charge upon enactment of the Bill. 3. (d) Amend section 69 (l)(e) insert the word "in consultation and concurrence with the Cabinet SecretaryresponsibleforTourismmatters"immediately after theword disbursement. 4. (e) Insert immediately after section 69 (l)(f) "To advise the Cabinet Secretary on amounts and timingfor thefund levy collection or transfers into theFund". 5. (f)Insection73(2) insertthewords"TourismorEconomicorBusinessmanagement"immediately after the word financial and a new paragraph immediately after 73(3) to read"73(4) The ChiefExecutive Officer appointed under section73(l)shall be the Administrator of theFund." andthecurrentsection73(4)tobe73(5).

Justification

• the appointmentof theCEO,thefunctions of theBoardof Trustees of theFund and the objects and purpose of the Fund.

Committeeobservation

55. The Committee rejected the proposals as they fall outside the legislative scope of the Bill. 2. 56.TheMinistryof Tourism andWildlife initsfollowup submission,notedtheproposal tofully reallocate theproceeds designated totheTourismPromotionFund to theTourismFund and subsequently leading to atotal deprivation of the apportionment to Tourism Promotion Fund,therefore leaving the Prmotion Fund with no financial provision to undertake the financial allocation and commitment already approved, appropriated and Board, Kenya WWildlife Service, Kenyatta International Convention Centre, Tourism 57. The Ministry posited that, in order to mitigate against procedural and substantive risks to phasing out TourismPromotionFund,and stalling of Tourism Promotion and development projects and programs and TPF operational disruptions,the Committee considers the followingamendments: 4. (i))Inthe amendment of section3of theAirPassengerServiceChargeAct Sub-Section3 be amended and retained as it is,with TourismPromotion Fund continue to get the apportionment andintroduce and includeTourismFund inthe apportionmentof the proceeds, together with Kenya Airports Authority, the Kenya Civil Aviation Authority, and Kenya Meteorological Service Authority, in such manner as the Cabinet Secretary may, by notice in the Gazette, specify". 5. (i)The amendment of the Tourism Act is in section 66(2) by inserting the following new paragraph immediately after paragraph (c)-"(ca) proceeds received under section 3(3) of the AirPassengerService Charge Act tobe considered as is.Theproposedconsequential amendment will ensure that the objectives and purpose of the designated mandate of Tourism Promotion Fund is maintained and strategic and blended funding approaches for capital projects through Tourism Fund is achieved. 58. The Committee, however, observed that the proposal to retain both Funds defeats the

3.4 Submission by the Kenya Civil Aviation Authority (KCAA)

59. The Kenya Civil Aviation Authority (KCAA) made written submissions vide a letter Ref. KCAA/CONF/00IC/VOL.7dated13tAugust2025.TheAuthoritysubmittedasfollows: 2. TourismFund based on the justification in the invitation to submit memoranda,butwithout a change in apportionment. 3. MeteorologicalServiceAuthoritysavefortheMeteorologyServicesforAirNavigationcomponent andattendantchargesthatarehousedatKCAAbasedontherequirementsof InternationalCivil Meteorological Service for International Air Navigation and attendant submissions made before the EnvironmentCommitteeofSenateinthewrite-upattachedhereto. 62. The Authority noted that the proposed allocation to the Kenya Meteorological Service Authority arrivedatbasedontheICAOcost-recoveryPrinciple3. 5. 63.TheAuthorityfurtherproposed anamendmentof section6Aof theAirPassengerServiceCharge Act (Cap. 475) by Inserting the words"..and the Kenya Civil Aviation Authority Fund established under the Civil Aviation Act,CAP394,respectively,..immediately after the wordsKenyaAirports Authority'; andInsertthewords...inproportionsdeterminedbytheCabinetSecretarypursuantto sectionl0ofthis Act"attheendof thesentence. 6. 64.The justification of this amendment is to enable the Commissioner toremitKCAA'sportion of the charge directly toKCAA as opposed to the currentpractice,where the charge isremitted through challenges. 65. Further, as a consequence of the proposed amendment, the Authority also proposed the amendment of s.I7C(b) of the Kenya Airports Authorities Act, CAP 395 by deleting: the word AirPassengerService Charge Act." 8. 66.Thecommitteeconsidered thesubmissionsofKCAAonthe administrationof theKAA Fund; however, the proposed consequential amendment will unduly expand the subject of theBill.

3.5 Submission by Kenya Airways

KenyaAirwaysmadeawrittensubmissionvidealetterdated13thAugust,2025andsubmitted asfollows:

67. The aviation industry has long been a critical sector for global economic activity, connecting people,goods,and services across countries.However, the industry continues to grapple withincreased financialburdens due to a variety of taxes,fees andcharge structures imposed by governments worldwide, airport authorities, and other stakeholders. 2. s s po s s i s s e s influence on ticket pricing, profitability, and passenger demand/traffic. 69. The National Carrier submitted that it supported the inclusion of the Kenya Meteorological Service Authority as a new recipient of the Air Passenger Service Charge proceeds as it wouldstrengthenmeteorologicalservicesgiventheirroleinenhancingflightsafetyand operational reliability. 70. The National Carrier, however, noted that any change in allocation should be structured so thatitdoesnotreducetheresources availabletoagencieswhosefunctionsdirectlyenable airline operations, such as KCAA and KAA.Safeguarding these allocations will ensure continuedinvestmentininfrastructure,oversight,andservicesthatbenefitboththe airline andthewideraviationsector. 5. services via air navigation charges and cautioned that introducing funding from passenger charges may affect cost distributionbetween passengers and operators. 6. beneficiary,the Airline noted that the change addresses duplication in tourism sector funding mechanisms, but also noted that transition arrangements should be clearly defined through theTourismPromotionFund. 73. As regards the apportionment authority, the National Carrier noted that the Bill retains the reference to the Ministry of Transport. This approach preserves flexibility in revenue distribution.It emphasised the importance of continued engagement with stakeholders duringanyreviewof allocationstoensurethatfundingdecisionsalignwithsectorpriorities andsupport thesustainabilityof all beneficiaries. 74. Kenya Airways appreciated that the Bill does not alter the existing rates (USD 50 for external journeys, KES 600 for internal journeys) or exemptions. Maintaining the current

rates provides stability for passengers and operators, while the inclusion of a new beneficiary offers an opportunity to optimize allocations within the existing revenue framework so that all mandated functions,including those that directly support airline operations,continuetobewellresourced.

• provision empowering the Cabinet Secretary to vary these charges, from time to time, by notice inthe Gazette.However,Kenya Airwaysnoted that suchvariations,if done without consultationswith the sector stakeholders,canhave significant implications for the sector, proposedchangesbeprecededbyastructuredstakeholderengagementtoensurethat adjustments are predictable, transparent, and aligned with sector priorities.

76. Discourses on aviation charges in Africa today appreciate the fact that the aviation sector in Africa is seriously being overtaxed,making travel by air very expensive.There is growing consensus on the need to use any available opportunity to reduce and or rationalize aviation taxes,charges and levies to spur air passenger and cargo traffic and thereby grow Africa'saviation.

• 77.Kenya Airways submitted that, according to the Official Airline Guide (OAG), Intra-Africa passenger trafficis only30%,Domestic37%and33%international.Africahas apaltryless than 2% share of the global air passenger traffic. The lower traffic demand is mainly attributed toeconomicalfactors,lowtradebetweenstatesandother economicbarriers. The high costs to airlines of operations,leases, ground handling, navigation, high Africa's aviationnoncompetitive.
• 78.The Airline brought to the attentionof the Committee that inNovember 2024,the ECOWAS Experts andMinisters-in-Charge of Air Transportheld a consultative Meeting in Lome-Togo,focusingonAeronautical Charges.The meetingrightlyobservedthatthe aviation
• 79.The Commissionmade the bold recommendation of removal of four taxes:Ticket tax, development of aviation and yet have a high adverse impact on the competitiveness of airlines.AccordingtotheCommission,theremovalofthesetaxeswouldcreate/stimulate new andadditionaldemandfor air transport services,reduce the airfareby40% and generatemorerevenuefor theStates.
• 80.Additionally,the Commission further recommended a minimumreduction of 25%of passenger charge and security charge, both considered excessive relative to the services provided.TheseweretoenterintoforcebyI*January2026.Thetotalfarepriceoftickets within the EAC/ Northern Corridorregion is impacted by thehigh taxation.

81. Kenya Airways made the following recommendations to ensure operationalisation of the Bill oncepassed:

• i) Ensure that theinclusionof theKenyaMeteorologicalService Authorityis implemented ina manner that sustainsorenhances thefundingoffunctions that directly support airline operations, such as air navigation oversight, safety regulation, and airport infrastructure.
• i) Need toexplorefundingmodelsforaviationmeteorologicalservicesthatalignwith ICAO principles and sector best practice, ensuring they are cost-neutral to airlines andpassengerswhilestill strengtheningservice delivery.

4. ii) Putinplaceclear transitionarrangementsfor theshiftfromtheTourismPromotion pue sasod uuo penes on pung wsnol un o pun predictablefundingflows. 5. iv) Continuestructuredengagementwiththeaviationsectorinanyreviewof support long-termsectorgrowth. 6. The charge should be maintained as is or in theworst-case scenario,reduced so as nottofurtherimpactthecompetitivenessofKenya'saviation.WheretheCabinet Secretary exercises the authority tovary AirPassenger Service Charges,ensure that this is preceded by comprehensive consultation with the sector stakeholders,with adequatenotice to allowforoperational andcommercialplanning.Such engagement will help ensure that any adjustments are predictable, transparent, and aligned with sector sustainability. 7. 82.Kenya Airways noted that the current Act does not provide a formal dispute resolution allow appeals to theTaxAppeals Tribunal andhigher courts. 83. This amendment would provide a transparent and predictable process for resolving disputes, minimize uncertainty and protracted disagreements, reduce litigation costs, and enhance compliance while protecting revenue timelines.

Committeeobservation

84. The Committee rejected this amendment as it is outside the scope of the Bill. 85. In concluding its submissions, Kenya Airways presented that it fully supports measures that enhance aviation safety, operational efficiency, and service reliability, including improved

meteorological services that contribute to safe and timely flight operations. In implementing the Bill, it is important to maintain funding levels for functions that directly support airline operations, such as regulatory oversight and airport infrastructure. We encourage the adoption of an implementationframework thatsafeguards thesepriorities,ensuressmooth regionalaviation.

CHAPTERFOUR

4.0COMMITTEEOBSERVATIONS

• (g)TheCommittee,havinghad engagementswithstakeholders andconsidered submissions received,made the following observations;
• I)Theproposed amendment aims toreallocate theproceedsoriginallydesignated forthe TourismPromotionFund(TPF) to theTourismFund establishedundertheTourismAct (CAP.38l)toprovide for the allocationofproceeds derivedfrom the air passenger addition to the Kenya Airports Authority and the Kenya Civil Aviation Authority.
• 2) The Kenya Meteorological Service Authority is a proposed entity that will be established under the Meteorology Bill 2023,which the Senate Majority Leader sponsors. At the time of considering this report, the National Assembly had passed the Senate Bill with proposed amendments. If this amendment to theAirPassengerService ChargeAct(Cap. 475)passesearlierthanthecreationof theAuthority,fundswillbeearmarkedfor an entity that is legallynon-existent;
• 3) The Aeronautical Meteorology Division of the Kenya Meteorological Department (KMD) is essential to the safety, efficiency, and regularity of both national and international air navigation. KMD provides accurate, real-time meteorological information and briefings to pilots, air traffic controllers, and airport operators; and
• 4)The Air Passenger Service Charge Act (Cap.475)provides that all proceeds of the air Cabinet Secretary may, by notice in the Gazette,specify. As the aviation sector continuestoexpand,therevenuegeneratedfromthischargeisexpectedtoincrease clearly defines an equitable formula for sharing these funds.

CHAPTERFIVE

5.0COMMITTEERECOMMENDATION

• (h) The Committee, having had engagements with stakeholders and considered submissions received, recommends that the House approves the Air Passenger Service Charge (Amendment)Bill(NationalAssemblyBillNo.35of2025)withamendmentsasper the schedule of amendments formingChapter6 of this report.

SIGNED..

DATE..!...8..02S.

HON.GKGEORGEKARIUKI,CBS,M.P.

CHAIRPERSON,DEPARTMENTALCOMMITTEEONTRANSPORTAND INFRASTRUCTURE

6.0.SCHEDULEOFAMENDMENTS

Upon considering the Air Passenger Service Charge (Amendment) Bill, 2025, National AssemblyBillNo.35of2025andsubmissionsfromstakeholders,theCommittee proposesthefollowing amendments:

CLAUSE2

THATClause2oftheBillbeamendedby-

• (a)insertingthe word'and'immediately after thewords"Kenya Civil Aviation Authority"
• after the words"Tourism Fund".

Justification:

TheamendmentseekstoensurethattheBilldoesnot allocatepublicfundstoanonexistent Authority by removing reference to the Kenya Meteorological Service Authority that is yet tobe established in statute.

Annexure I: Signed list of Members who attended the sitting that considered and adopted the report.

REPUBLICOFKENYA THE NATIONALASSEMBLY

I3THPARLIAMENT-FOURTHSESSION-2025 DEPARTMENTALCOMMITTEEONTRANSPORTANDINFRASTRUCTURE

MEMBERSADOPTIONSCHEDULE

1f -08-- 202s

DATE:

CommiTee.. Hloo.....Bunge...ow.... VENUE:.. .PoRO...

Consicarhougnd .Aeloh............ Passeoge- AGENDA:.. SeNice

| NO. | NAME | |-------|---------------------------------------------------| | I. | The Hon. GK George Kariuki, CBS, MP - Chairperson | | 2. | The Hon.Didmus Barasa,MP-Vice Chairperson | | 3。 | The Hon. Kiunjuri, Festus Mwangi, MP | | 4. | The Hon. Abdul Rahim Dawood, MP | | 5. | The Hon. Arama Samuel, MP | | 6. | The Hon. Bady, Bady Twalib, MP | | 7. | The Hon.Francis, Kajwang' Tom Joseph, CBS, MP | | 8. | The Hon. Kiaraho, David Njuguna, MP | | 9. | The Hon. Naicca, Johnson Manya, CBS, MP | | 10. | The Hon. Chege, John Kiragu, MP | | I1. | The Hon.Elsie Muhanda, MP | | 12. | The Hon. Saney, Ibrahim Abdi, MP | | 13. | The Hon. Hussein Weytan Mohamed, MP | | 14. | The Hon.Jhanda Zaheer, MP | | 15. | The Hon. Komingoi, Kibet Kirui, MP |