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As part of new moves to save the ailing aviation sector from suffocations caused by tax related challenges, the Federal Inland Revenue Service (FIRS) has proposed a flexible tax payment regime that will meet their Value Added Tax (VAT) remittance obligations.
Chairman of the federal agency, Mr. Babatunde Fowler, made the proposal during a recent visit of a delegation of the Airline Operators of Nigeria (AON) and the International Air Transport Association counterpart.
In a statement, the airline industry was said to be challenged on tax issues and that the FIRS is working to offer domestic airlines a soft landing.
Fowler said FIRS will give airlines a concession of two months after the billing period (M+2) to make their VAT remittances so that collections done now are swept during the upper month instead of the following month so as to give room for reconciliation and for the carriers to recoup their credit sales.
He added that time has come for operators to engage the Presidency, the Senate and the Minister of Finance on how the laws could be amended to address their challenges.
In his remarks, the Chairman, AON, Capt. Nogie Meggison, said the carriers had no problem with paying or collecting the statutory VAT for the FIRS, but that there was a need to look into the issue of fairness against competitors, clarity on the automation as well as a 30-day period to allow for invoicing, reconciliation and billing before payment.
AON boss averred that there is serious need for more discussion between the FIRS and AON in order to better understand the automation process and allow smooth operations for both parties, stressing that if VAT is removed from airfares, more passengers will find air transportation affordable and the airlines will remain in business.
According to the IATA Area Manager, South/West Africa, Dr. Samson Fatokun, said airlines in the country had an average mortality rate of about 10 years.
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