Home / Aviation News / AON lauds FG on Executive Order to remove VAT on shared transportation

AON lauds FG on Executive Order to remove VAT on shared transportation

AIRLINE Operators of Nigeria (AON) today expressed joy as the Federal Government of Nigeria issued an Executive Order for the removal of Value Added Tax (VAT) from “All Forms of Shared Transportation”, which we believe includes Air Transport.

The airline operators who thanked President Muhammed Buhari and the Federal Government of Nigeria for listening to the cries of domestic airlines further prayed that the President will go a step further to encourage the House of Assembly to pass this Executive Order into law as quickly as possible.

The body in a statement said the decision by the Government following the Federal Executive Council (FEC) Meeting of June 6, 2018 presents a veritable opportunity for the aviation industry to immediately take advantage of the decision to expedite a White Paper to that effect.

AON Chairman, Captain Nogie Meggison said: “We as Nigeria have been crying out for decades now for discussions on the immediate removal of VAT from domestic air transportation in line with global best practice, but we have barely been heard over the years. VAT is an added burden on our passengers who have limited disposal funds and have reached their elastic point in this difficult time in the nation’s economy.”

This adversely affects the sector by reducing the number of those who can afford to travel by air due to high fares in this tough economic time. This has been shown to be true according to a recent report from the Federal Airports Authority of Nigeria (FAAN) that passenger traffic dropped by 27% in 2017 and by another 7% in the first quarter of 2018 making it a total of 34% drop in passenger traffic within a span of one year.

Furthermore, he noted that: Domestic Air transportation in Nigeria is the only mode of commercial transportation that pays VAT. Road, rail, marine and even foreign airlines operating in Nigeria don’t pay VAT in their home country or in Nigeria with reference to an information circular by the Federal Inland Revenue Service (FIRS) which grants them VAT exemption (Information No.: 9701; Circular Dated 1st Jan. 1997); Part L (b) No. 8.

According to Meggison, VAT on commercial air transportation is a huge departure from what obtains worldwide and an increased burden on the Nigerian travellers stating that countries like Ghana, Benin Republic, Togo and Cote d’Ivoire located next door to Nigeria have all abolished VAT for air transportation.

The recent decision by the Federal Government to remove VAT from Domestic Air Transportation will go a long way to bring succor to groaning Nigerian travelers to be able to afford to travel by air and the growth in demand for domestic air travel will lead to the creation of jobs by the whole air transport service chain (airlines, airports, ground handlers and catering companies) as well as increase revenues for government.

This is a step that Ghana took over a year ago and the benefits are there for all to see today as Accra is fast becoming the Aviation Hub for West Africa.

AON would therefore like to use this medium to once again thank President Muhammed Buhari and his administration for coming to the aid of domestic airlines by the recent Executive Order to remove VAT from all forms of shared transportation.

It is our prayer that the President will go a step further to encourage the House of Assembly to pass this Executive Order into law as quickly as possible.

This will go a long way to encourage more Nigerians to fly and put the airlines on a positive footing to grow the economy and contribute to the GDP. It will also encourage increased direct and indirect services that will create more jobs for our Nigerian youths thereby crowning the efforts of the President Muhammed Buhari government that has shown a lot of faith in the Nigerian domestic aviation sector with the giant strides aimed at ameliorating the challenges of the sector including the implementation of Duty Waiver on the importation of aircraft, aircraft engines and spare parts.

“We therefore thank President Muhammadu Buhari for his visionary leadership and fatherly understanding of the challenges being faced by domestic airlines by announcing the recent Executive Order on Removal of VAT which will turn around the airlines to be able to grow the economy and contribute positively to the GDP and create more jobs for our Nigerian youths”, Sir Nogie Meggison submitted.

About NigerianFlightDeck

Nigerianflightdeck is an online news and magazine platform reporting business stories with a bias for aviation and travel. It is borne out of the intention to inform, educate as well as alter perceptions with balanced reportage.

Check Also

AIB releases preliminary report of VP helicopter crash, issues two immediate safety recommendations

The initial findings also indicated that the bureau could not conduct drug and alcohol tests on the pilots and according to the weather report obtained from the Nigerian Meteorological Agency (NiMET), the prevailing conditions were good but that the aircraft hovered to land in a brown out condition.

NCAA investigates trending picture of worn out aircraft tyres, yet to establish photo veracity

"In addition to the Authority oversight roles, NCAA has placed the onerous responsibility of the first line of safety on the operating airlines’ Pilot In Command of each flight and the assigned Engineer that authorized each flight. With all the various checks and counter checks put in place by NCAA combined with that of the operators, it is therefore improbable that any airline in Nigeria will operate a service with that kind of tyre.

TSA: NAMA insists non-schedule operators must adhere to cashless payment

As part of the resolutions made at the end of the meeting, operators or their representatives are to each open and fund a domiciliary account with which to effect all financial transactions with NAMA through monetary transfers to the agency’s sub-account with the CBN using a smart phone.

Leadstream Aviation initiates plans to bring in Boeing Simulator

Tinkers strategies to save airlines operational downtime LEADSTREAM Aviation Training, recently approved as an Approved …

Onyema honours pioneer manager, charges aviation staff to imbibe hard work

CHIEF Executive Officer of Air Peace, Mr. Allen Onyema has urged aviation workers, especially those …

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this:
Skip to toolbar