AIRLINE Operators of Nigeria (AON) last night queried a myriad of ‘unfriendly’ policies they face as operators and how the harsh operating environment comprising VAT, Customs duty, TSC/CSC has stunted their growth.The operators comprising Chief Executives of various airlines in the country stated therefore that in order to save the industry from impending collapse the above issues threatening the well-being of the industry need to be addressed.
Chairman of the AON, Captain Nogie Meggison declared that government had provided for Zero Customs Duty on Commercial aircraft , spares and engines however, in 2018 the industry is yet to fully benefit from this provision with airlines having some of their aircraft fleet grounded for days in some cases.
He said,”The government has provided for Zero Customs Duty on Commercial Aircraft, Spares and Engines. Unfortunately, in 2018 the industry is yet to fully benefit from this provision.”
“This 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. This situation is unacceptable and should be reversed forthwith.”
He called on Federal government to immediately institute the necessary mechanisms to ensure that the Customs Duty Waiver to Commercial airline operators as proposed and agreed should be fully effected.
The AON again decried what it termed as unfair, a situation where Value Added Tax (VAT) is imposed on airlines and not other modes of transportation stating that it adversely affects domestic travel.
Megisson further decried that even some airlines were being exempted from the tax making it worse and unfair.
“Nigerian Domestic Airline Travel is the only mode of transportation that is subjected to the Value Added Tax (VAT). This imposition creates a suppression of domestic airline travel demand; therefore resulting in airlines not being able to optimally utilize their aircraft assets and more importantly creating a market distortion.”
“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 paying VAT and the VAT which we pay is being used to subsidize our competitors against those that are making payment is unfair.”