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Strong indications emerged Monday revealing that there may be an underground plan by local airline operators to go on warning strike to remind the Federal Government of continued abuse of an Executive Order stopping payment of Value Added Tax on airlines by the same government that handed it down since last year.
Business Hilights recall that in 2018, the Federal Government issued an Order removing VAT on airline tickets but for more than one year of the order, the same Federal Government has failed to implement the order.
Airlines still pay VAT, charged as five per cent on every flight ticket sold and remitted to the Federal Government and random checks showed that the government may have raked in well over N50bn from a levy it has outlawed.
Even before the Executive Order, the Airline Operators of Nigeria (AON) had threatened that its members would no longer pay VAT with effect from June 14, 2018, saying that VAT remittance was unfair, as only domestic airlines were made to pay, while foreign airlines were exempted.
The airline body had lamented that air travel was also the only mode of transportation that was subjected to the payment of VAT, which had resulted in airlines not being able to optimally utilise their aircraft assets.
Industry analysts who spoke with Business Hilights at Abuja Airport on Monday, said some of the aggrieved members of AON have started thinking of embarking on at least, a one day warning strike where on local airline will fly for at least 12 hours to press home their demand and further remind the government to do the needful it agreed without any pressure.
However, in a shallow reaction to the anger of airline operators, the Director of Air Transport Regulations at the Nigerian Civil Aviation Authority (NCAA) and member of the Presidential Committee on Airlines’ Taxes and Charges, Group Capt. Edem Oyo-Ita (rtd.), reluctantly averred that government is yet to give any reason to order a stop on VAT remittance from airlines.
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