Air travel from 2015 to date in the region has reported an estimated 11% growth. This can’t go unnoticed especially at the backdrop of choking taxes. What then can be done to further harness this growth? The recent reduction of taxes by the Austrian government to passengers and airlines should be a learning case for East African governments to grow aviation in the region.
An initiative by governments to reduce taxes will make the regional air space cheaper to fly across and ultimately will attract more airlines into the region. This will of course increase air traffic flow in, out and around the region and bring with it a bag of extra goodies.
To begin with, a reduction and standardisation of taxes will relatively cheapen air travel within the region. Many will be relieved to know that they can afford to reduce the 12 hours it would take them to travel to Kampala from Nairobi to just 45 minutes, or the 24 hours from Dar el Salaam to Kigali to 1 hour. This will boost domestic air travel. Reduced and standardised taxes can further facilitate the single visa for foreigners to access the region. The single visa will grant visitors unlimited access to the region thereby making the region more accessible to foreigners. This all will mean an increase in revenue.
The boom in the aviation sector will spill over to other sectors directly connected to aviation. Tourism activity in particular will boom. This will in turn spill over to the leisure and hospitality sector. More tour companies shall be engaged to serve the swelling number of tourists flocking the region. Accommodation facilities shall come in handy for the tourists. Tourists may also want to check out what the region has in stock in terms of art i.e song, dance, drama, folklore, architecture, medicine, etc.
The talk then of reduction and standardisation of taxes is not a misguided one that will affect trade and negatively impact the region’s economy. On the contrary, the opposite is true. Where the region’s economy will seem to loose, it will gain in the long run. By reducing and standardising the taxes, the region will undisputedly lose out on some revenue. But it is the aftermath of its ripple effect that is interesting. Economic activity within the region will be stimulated and adding one by one, the region’s economy shall register its bundles.
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