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Airline owners to suspend VAT payment over discriminatory tax regime

Louis Ibah

Domestic airline owners in Nigeria yesterday said they would halt further payments of Value Added Tax (VAT) on their services to the Federal Government as from June 14, 2018 as part of measures to compel the government to abolish all existing  discriminatory tax regimes between foreign and local airlines operating in the country.  

Chairman of the Airline Operators of Nigeria (AON), Capt. Nogie Meggison who disclosed this to aviation correspondents also said investors in the local airline industry are becoming uncomfortable with the secrecy shrouding the proposed national carrier and urged the government to be more transparent in its dealings with the industry and Nigerians on the project.

Meggison who said the Federal Government had failed to work towards the implementation of the waiver on Custom Duty for imported aircraft and spares by commercial airline operators queried the rational for the invested of public funds in the establishment of a government-owned carrier that tended to negate the global trend  of the contemporary time.

Said Meggison, “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, a National Carrier can only result in a huge distortion to the current market and will be a huge drainpipe to government’s treasury. Moreover, this model is no longer practicable worldwide. We urge the Federal Government to provide clarity on the agenda whether it’s for job creation or for profit as well as steps being taken in the establishment of this National Carrier, especially when viewed against the background that this airline will commence operations on December 24, 2018,” Meggison added.

Meggison said in the last three decades, over 50 indigenous scheduled commercial airlines have existed in this country, but only seven  are flying today owing to a myriad of problems which the government has failed to address. “Nigerian domestic airline travel is the only mode of transportation paying VAT in the country today as road, rail, marine and particularly international airlines do not pay VAT,” said Meggison.

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