There is an imminent face-off between the Federal Government and airline operators over payment of Value Added Tax (VAT). The operators under the umbrella of Airline Operators of Nigeria (AON) on Friday rose from their meeting where they resolved to stop remittances of VAT from June 14.
They also cautioned government against setting up a national carrier with tax payers’ money.
The CEO of Topbrass Aviation, Mr. Roland Iyayi, who briefed newsmen after the meeting, said the aviation industry is the only transportation sector still burdened with VAT payment.
“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.
“Moreover, a situation whereby some airlines are paying VAT while some other privileged airlines are not and the VAT which we pay is being used to subsidize our competitors against those that are making payment is unfair,” Iyayi said.
The indigenous airline operators in attendance were Alhaji Muneer Bankole, Chief Executive Officer of Med-View; Barr. Allen Onyema, the Chief Executive Officer (CEO) of Air Peace; Mr. Roland Iyayi, CEO Topbrass Aviation; Capt. Nogie Megission, CEO, Jed Aviation who is also the Chairman of AON; Mr. Obi Mbanuzuo, the Chief Operating Officer (COO) of Dana Air; and top representatives of Azman Air; Firstnation Airways and Overland Airways, among others.
The Daily Trust report that there has been disquiet among airline operators over what they describe as “preferential treatment” given to airlines it manages – in apparent reference to Arik and Aero Contractors which were taken over by the government debt recovery agency, Assets Management Corporation of Nigeria (AMCON).
The operators, however, resolved that “Effective June 14, 2018, its members shall cease to make VAT remittances as this is unfair as some airlines are paying while some other airlines are not paying domestic VAT charges.”
The operators insisted that many charges imposed by the Federal Government on domestic carriers, including the five per cent passenger and cargo charges collected by the Nigeria Civil Aviation Authority (NCAA), have driven away passengers while only seven airlines out of over 50 domestic carriers are currently in operation.
They said data collected from the Federal Airports Authority of Nigeria (FAAN) indicated that passenger traffic has greatly reduced.
On the planned establishment of a national carrier, Iyayi said, “Whilst we are not averse to the government providing a conducive operating business environment and a level playing field for the establishment of a private sector driven flag carrier, the idea of using tax payers money to float a ‘national carrier’ in 2018 is not only counterproductive, but inimical to the overall interests of the present corps of private entrepreneurs.”
“In the overall scheme of things, “national carrier” can only result in a huge distortion to the current market and will be a huge drainpipe to government’s treasury, he said.”
They called on the Federal Government to clarify the agenda – whether it’s for job creation or for profit – as well as steps being taken in the establishment of the ‘national carrier’.
Furthermore, the operators berated the multiple entry points granted foreign airlines, saying the action further “decimates the domestic air travel market and depletes the nation’s foreign reserves and jobs.”
“AON’s position is that any foreign carrier should be restricted to only two points of entry into the country and explore interline options with domestic airline operators should it become necessary for expansion so as to protect capital flight and the jobs of our ailing Nigerian youths,” it added.
