There have been strident calls by airline operators, demanding for one-off tax on flight ticket by aviation agencies.
The operators have decried the multiple taxation, which they say is fluid, confusing and exploitative, noting that when these taxes are built into the ticket, travellers tend to think that the total cost of ticket is a take home for the airlines.
Airline Operators of Nigeria (AON) at different fora have complained about the multi taxation. The operators said these taxes are stifling their operations and government seemed ambivalent in response to their call over the years.
Domestic airlines, on the average, pay about 35 percent to 40 percent of a ticket cost as taxes and charges that come under the guise of statutory levies in addition to other charges. The implemented charges range from Terminal Navigational charges to enroute navigation charges, Over-flight charges, clearance charges, and extension charges. Even foreign airlines don’t pay enroute charges or extension charges, which the local airlines are forced to pay.
The levies are divided into aeronautical and non-aeronautical revenues and are added to charges collected from passengers as air tickets by the airlines. 21 of the charges are paid into the coffers of the Federal Airports Authority of Nigeria (FAAN), six are paid into the Nigeira Civil Aviation Authority (NCAA) coffers, the Nigerian Airspace Management Agency (NAMA) collects three while Bi-Courtney collects four of the charges from the airlines that operate at its terminal.
“The breakdown of aeronautic charges included aircraft inspection, which is tickets and Duty Tour Allowance (DTA) paid to the coffers of NCAA for aircraft inspection overseas. The DTA depends on the country the aircraft is being inspected. Also, landing charges are divided into two; day and night. During the day, airlines pay N25 per Kg kilogramme of the aircraft weight while they are charged N37.5 per kilogramme of the aircraft at night. FAAN collects the charge from airlines (maybe this has increased).
Also, FAAN collects about N400 per weight of aircraft after 30 hours from airlines as parking charges while the agency also collects between $40 and $50 from airlines for using the Avio Bridge. For en-route charges, FAAN charges $70 from airlines on international routes while it collects about N3,000 for carriers on domestic routes.
AON said indigenous airlines are compelled to pay NAMA $75 as a charge for over-flight while it equally collects $195 from airlines that operate international or regional flights outside the country while N6,000 is remitted by indigenous airline operators for the same terminal charge. The aeronautic agency also collects clearance fees for indigenous airlines.
Besides, N2, 500 per passenger is remitted to the purse of BASL as Passenger Service Charge (PSC) for any air traveller airlifted by airlines at the terminal. The terminal operator also collects $50 from airlines for using its Avio bridge while it collects another $50 as extended Avio bridge usage. Also, BASL collects $00.50 from operators as a check-in counter fee (as ta last year).
The breakdown of non-aeronautic charges indicates that the NCAA collects 5 per cent of total fare from airlines as Ticket Sales Tax (TST), and another 5% each as Import and Export Charges for domestic operators.
The regulatory authority also charges airlines 10 per cent each as Import and Export Royalties.
Also, FAAN collects N2,000 for domestic operations and $50 for international operations as Passenger Service Charge (PSC), and charges N12 per kilogramme as a Ports Charge.
The same agency collects N5 per kilogramme as Export Charge, N20 per kilogramme on Courier/Tarmac/ Pre-Release and N5 per kilogramme as Air Cargo.
Recently the Managing Director and CEO of Aero Contractors, Captain Ado Sanusi, reiterated the call for a review of multiple taxes on flight ticket by aviation agencies and insisted that it is very important to streamline the payments because one of the major factors that kill Nigerian airlines is over taxation.
“As a proposal to the federal government on these taxes, I have made several proposals. I will make one now. Let them scrap the 5 percent. Let them have a figure, one figure that airlines should be. One figure that scheduled airlines should pay. And then let NAMA have one charge. So we know we are paying NAMA and NCAA for service. And then FAAN, or we can even have one figure and then they can share among the three of them.
“But for us to pay 5 percent, and then pay also for all the services that NCAA renders is not good for the sustenance of airline business in Nigeria. So, I pay 5 percent of my ticket sales. And then I will pay for all the services that they will render. So if they are coming to inspect an airplane, they should pay for that. If they are going to do AOC renewal, they should pay for that. So you pay 5 percent and you pay that.
“I hope you are counting. And then you go to NAMA, you pay for enroute navigation, which I introduced (as former Managing Director) and then you pay terminal navigation. So, I think that for domestic, I think we should remove one. I think we should remove enroute and leave the terminal. I think that is that. And for FAAN, of course, we should have landing. Of course, when you land, you have to pay for it. But that can be consolidated to one tax only,” Sanusi said.
He said that the airlines have made a good presentation to the agencies and government and hoped that they would buy the recommendation of the airlines.
Sanusi said that the high taxes, the unfavourable economy have dogged at the operations of the airlines, leaving some of them in precarious state, observing that the airlines and the aviation sector cannot be insulated from the economic outlook of the country.
“You know, in any society, you cannot be more efficient than the system you operate in. So, the economic condition in the country, the aviation industry cannot operate more efficiently than the economic situation we have.
So, if the economists say we are in recession, then definitely the situation of the aviation industry will be reflected in that. We are experiencing challenges in our economy, definitely there will be challenges in the aviation industry. You cannot operate outside, you can’t be more efficient than the system you operate in, and we have economic challenges. So, all these issues of saying we have made progress and all that, if we are telling ourselves the truth, we have not. That is the truth, we have not. And unless we agree that we have not, and we now work towards recovering the economy and then building the aviation to have a sustainable aviation industry, I think we will just be going in a cycle and telling ourselves lies. And unfortunately, that is what is happening,” he said.
Domestic airlines have called for the review of taxes on their operations for many years and hopefully the government may begin to listen to them.
