sorry new 777-300 ,carries 420,compared to the 777-200 which carries 100 less.

Dang! KQ is screwed. Even if KQ gets an exemption, it means a lot of lobbying and that costs money. After all lobbying MPs [& Treasury folks] means free flights + retreats + favors.

Anyway, KQ's current CEO and CFO do not really care coz they significant have no ownership stake!

Only after KQ chotas some freebies for the MPigs.

KRA could seize the plane or other assets as well as freeze bank accounts AND impose penalties. So KQ is screwed since the refund will take ages to recover.

When KQ pays VAT on such purchases, can it 'sell' the VAT rebate/refund to another entity e.g. Nakumatt which can offset the VAT paid with VAT payable?

Nakumatt probably remits VAT [collected from final users/buyers] to KRA since its Input VAT is lower than Output VAT. Or does poor KQ need to become a retailer just so it can 'collect' VAT (from consumers) to offset its huge Input VAT?

Doesn't a Treasury rep sit on KQ's board? What was KQ doing when this Bill was being drafted?

Of course, the CEO was busy lobbying for another year on his contract to make sure the 787 gets delivered so he can claim 'success' and get a huge payoff [gratuity, etc] as a sendoff package!

@obiero - Pole sana. I am glad I stayed out. And I see little significant progress for KQ in the immediate future. Perhaps in 2015-16. The financing costs will kick in for KQ for both the planes and VAT. And the CEO's send-off package.

Karibu.

How is the accounts office doing ama ni PR ?

Seriously though, that tax burden hawawezi..

See below

To expect an excellent 2013 is a tall order. But trust @Obiero especially if your target is 2015, a very high revenue target is being set, Several staff being trained on sales, Jambojet success, Greenfield, expected new ceo, etc. The expectation of poor numbers could drive price down slightly, but could spark a huge demand based on discount opportunity or when the dust settles, just like EABL (is it because they share a board member?).

@alykhansatchu doesn't refer to a stock as undervalued in vain. "Kenya Airways' commercial director steered FY earnings expectations higher and towards a FY profit and this is yet to be reflected in the price. - See more at: http://www.the-star.co.k...ash.5C1Mldfv.dpuf"

Disclaimer: I own a few KQ shares @ 12.30

A plane [787 & 777] costs $100-300mn and whose 'lives' can be 20 years.
16% of 100mn = 16mn so it is highly unlikely that a plane delivered 3 months ago has generated enough cash/profit to pay the VAT of a new plane. Furthermore, these planes have been bought with borrowed funds so KQ has to pay the monthly instalments and other fixed and variable expenses before having 'cash' to be used to make VAT payments for new planes.

Some of these planes are leased, which is a much better deal as they avoid vat issues and lease expenses are deductible. See last para

http://t.co/4WEFzKlLuc

huyo mtu amesema KRA itashika KQ planes for any eventual default, must be living in Utopia.. those who saw KCB on its knees in 2004 as a loss making firm know what I am talking about

I may be mistaken but I think Leases [long-term that are essentially like Hire-Purchase] attract VAT.