High Taxes Affect Nigerian Airlines

Airline operators of Nige
ria (AON) have warned that if government does not rescind the policy of multiple taxation on local airlines, many of them would go under as it has happened many times in the past.
The operators said that as at today no airline in the country is making profit and many of them are existing on the fringes as they struggle to fund their operations and pay their personnel.
According to them, considering the crucial role air transport plays in the economy of the nation, government should urgently take action by stopping the multi taxation and also remove landing and packing charges for airlines’ operational bases.
They also commended government for removing custom duty on imported aircraft and parts but added that the waiver is not enough because the airlines’ domestic routes are being taking away by foreign airlines that operate into many airports in the country.
AON therefore, demanded that government remove the Value Added Tax (VAT) and other taxes like landing and parking charges as well as review aeronautical charges which they argued domestic airlines should not be paying in the first place.
The Deputy Managing Director and Head of Flight Operations of Arik Air, Captain Ado Sanusi, said that issues of multiple taxation should be tackled in order to assist the airlines sustain their operations.
“The issue should be talked and there are so many incentives that should be given to airlines that are coming up in order to protect and encourage them grow. If you look at the airlines that have been very successful in the world, they have protection and they were given government backing  to grow before they were allowed to compete with international carriers.
“So it is extremely important that government makes deliberate policies in protecting the industry and also allowing the airlines to grow, it should be in the interest of government to have viable airlines flying in the country,”   Sanusi said.
The Managing Director of Jed Air and the Executive Chairman of Airline Operators of Nigeria (AON), Captain Nogie Meggison, described the high taxes as unfair especially the VAT, which he said domestic carriers are the only subsector in the transport industry that pay such tax.
According to him, the Nigerian constitution says VAT should not be paid on Transportation, aviation is the only sector paying VAT in Nigeria. Any other transportation, road, rail, maritime does not pay VAT, only Aviation pays VAT. The International carriers have been able to defend against paying it and government gave them waiver not to pay.
So the International carriers are also not paying VAT, only the domestic carriers pays. W e pay VAT, passenger service charge and five per cent charges to the Nigerian Civil Aviation Authority (NCAA) and we also pay charges to the Nigeria Airspace Management Agency (NAMA), so, how many taxes are we going to pay?.”