FG killing local airlines with 37 taxes –Operators lament

Nigeria’s airline operators have taken the Federal Government to task over its continued imposition of about 37 tax items on their operation in the face of the prevailing harsh economic environment. The airlines, including Dana Air, Medview, Air Peace, Azman, Arik Air, Aero Contractors and First Nation, which spoke through the Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison, wondered why a government that says it is committed to sustaining job creation and economic growth, would deliberately suffocate operators with miscellaneous taxes at a time passengers’ disposable income has been eroded by inflation.

The major relief being sought by the AON from the Buhari administration include the removal of Value Added Taxes (VAT), review of the 5 per cent ticket sales charge to a flat rate in line with global best practices and the harmonisation of over 35 other tax charges, which add to their huge burdens.

According to Megison, Nigeria’s domestic airline industry is currently the only mode of transport that pays VAT since marine, rail, road and even international air travels do not pay.

He told Daily Sun the operators are losing over N2 billion monthly since the rising airfares and prevailing economic downturn have reduced the number of passengers flying to various destinations across the country. The development has now forced many operators to fly half their capacity on scheduled flights on some of the lucrative routes.

“Some of the major issues that need to be urgently addressed to grow the aviation sector include the removal of VAT as domestic airlines are the only mode of transport paying VAT – marine, road, rail and even international airlines don’t pay VAT,” said Meggison.

“There is also the need to review the 5 per cent Ticket Sales Charge (TSC) to a flat rate in line with the global best practices and above all the harmonisation of over 35 other multiple charges, which add huge burdens on airlines,” he added.

Other taxes or charges, according to the operators, include passenger service charge, charter sales charge, aircraft inspection fees, simulator inspection fees, landing charges, parking charges, terminal navigational charges, en-route charge, fuel surcharge, airport space rent, electricity charges,  apron pass and ramp access charges, and a newly imposed registration fee, all of which are paid to government agencies.

According to him, many of these taxes and charges amount to double taxation such that any incentive seemingly provided by government to airlines is taken back through them.   

Meggison, who is leading the airlines to the negotiations, said the new partnership would lift the industry as well as the airlines, the tourism and hospitality sectors.

“On our part as airlines, one major way that government can assist domestic operators is by removing all 37 multiple taxes that are heavy burdens on domestic operators thereby allowing airlines to offer just our cost of air fares,” Meggison said.

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