SIR NOGIE MEGGISON, CHAIRMAN,AON; DR. BABATUNDE FOWLER, CHAIRMAN,
FIRS; MR. JACKY HATHIRAMANI, MD, DANA AIR; MR. EWOS IRORO, ASST.
SECRETARY, AON; MR. ALLEN ONYEMA, MD, AIR PEACE.
Airline Operators of Nigeria (AON) has vowed that from June 14, 2018, its members would stop paying Value Added Tax (VAT) to the federal government, estimated to be over N15 billion annually.
AON made this known in Lagos yesterday during a meeting of the chief executives of airlines and attributed the short life span of domestic carriers to poor infrastructure, excessive charges and taxes; high cost and inadequate supply of aviation fuel.
The airlines accused the federal government of not being concerned by the these problems, but insist that airlines failed due to lack of professionalism in the running of their business.
Executive Chairman of AON, Nogie Meggison described the payment of VAT as unfair and explained that it is only Nigerian airlines that pat the tax, while foreign carriers that operate into the country are excluded as well as other modes of transportation.
“The AON’s position is that the VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international air travel carriers are not subjected to VAT,” he said.
He alleged that the federal government is using tax payers money to fund the proposed national carrier that is supposed to be private sector driven, noting that with government commitment to the national carrier it is evident that it would not give all airlines equal operating environment.
Meggison also explained that the establishment of this national carrier had been shrouded in secrecy and lacks transparency in its entirety, adding that using tax payers money and it’s apparatus to establishment an airline with a foreign core investor was not fair to Nigerian airlines and Nigerians.
Also speaking at the meeting, CEO of Top Brass Airlines, Roland Iyayi a member of the body, said the government has provided for zero customs duty on commercial aircraft, spares and engines but unfortunately, in 2018 the industry was yet to fully benefit from this provision.
This, Iyayi explained has resulted in airlines having some of their aircraft fleet grounded for days in some cases, thereby resulting in cancelled flights which in event results in chaos at our airports to the displeasure of our esteemed customers, adding that this situation is unacceptable and should be reversed forthwith.
On the Nigeria Civil Aviation Authority, (NCAA) 5% ticket sales charge/charter sales charge, he said that airline operators have always contended that the imposition of a percentage tax model creates a distortion in the industry.
We have recommended and continue to recommend that the unit tax model preferred and practised by over 90 per cent of countries globally and as recommended by the International Air Transport Association (IATA) be adopted immediately. It is worthy of note that all the industry agencies including the NCAA Regulator are established as Not-For-Profit organisations, essentially designed for cost recovery.
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“Unfortunately, over the years successive governments have encouraged the sourcing and increase in internally generated revenues (IGR) by these agencies, thereby completely negating the primary purpose for which they have been established,” he added.
