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Local airlines begin suspension of VAT remittances today over unfair tax regime

To press home their grievances over what they observed as existing discriminatory tax regimes between foreign and local airlines operating in the country, members of the Airline Operators of Nigeria (AON), will today stop further remittances for Value Added Tax (VAT).

It would be recalled that the body had last week, given the notice saying part of the reason for the halt is based on the observed lopsided enforcement of the VAT regulation in the nation’s transportation industry where only airlines pay VAT and nothing is done to railway and road transport operators which is contrary to the regulatory provisions.

The chairman of AON, Capt. Nogie Meggison, in an interview with aviation reporters in Lagos noted that “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”.

Besides, argued further that 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.

While arguing that 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, he queried the rationale behind investing public funds in the establishment of a government-owned carrier that tended to negate the global trend of the contemporary time.

According to him, “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.

AON chief averred that instead of working towards solving policy issues hobbling the performance of local carriers which had led to the collapse of over 50 indigenous commercial airlines which now remain seven, government is using public fund to set up another national carrier that will wipe local operators out of business after all.