Leading travels consultant, Prince Abubakar Mohammed has said that the reaction of the federal government to the announced suspension of VAT payment remittances by members of the Airline Operators of Nigeria (AON) was based on unarguable reasons adduced by the union in ending the payment ahead of government’s response.
In an interview, he said “Forcing airlines to continue remittances runs contrary to the original provision of the Act as other operators in the transportation industry had been left alone over time”.
“In fact, let me tell you, it’s not as if AON was aware that government will react like this, rather there are indications that they are ready to approach a federal high court if government had threatened to sanction the union.
Business Hilights recalls that domestic airline operators who had waited for possible sanctions, got a relief as President Muhammadu Buhari issued an Executive Order for the removal of Value Added Tax (VAT) from “All Forms of Shared Transportation”, including air travels.
Domestic airline owners had halted further payments of VAT on their services to the Federal Government from June 14, 2018 as part of measures to compel it to abolish all existing dichotomy in tax regimes between foreign and local airlines operating in the country.
In his reaction, Chairman of the AON, Capt. Nogie Meggison, told journalists that news of the VAT abolition was received with a lot of excitement by local airline owners.
According to him, “The AON would like to thank President Buhari and his administration for coming to the aid of domestic airlines with the recent Executive Order to remove VAT from all forms of Shared Transportation”.
He averred that his members had been crying out for years against the remittances in line with global best practice, but now reprieve have come and the development will save operators’ a lot.
However, he was silent on whether the development would amount to drop in airfares going forward.
