Nigeria's coterie of privately-owned airlines have threatened to cease paying Value Added Tax (VAT) citing its selective enforcement.
Following a meeting of the Airline Operators of Nigeria (AON) last week, member carriers that include Med-View Airline, Air Peace, TopBrass Aviation, JedAir, Dana Air, Azman Air, First Nation Airways, and Overland Airways, said they had resolved to stop VAT remittances to government with effect from June 14.
According to the Daily Trust newspaper, TopBrass CEO Roland Iyayi said the decision to resist the tax is as a result of government's selective implementation of the VAT statute. The operators bemoaned the fact that aviation is the only mode of transport that is still subject to the tax. They also called out government for its alleged preferential treatment of Arik Air (W3, Lagos) and Aero, both of which are now controlled by the state-owned Asset Management Company of Nigeria (AMCON), for their alleged non-payment of VAT.
They collectively blamed over-taxation for driving many local operators out of business while at the same time, inhibiting passenger growth through increased costs.
AON also said that government's plans to establish a new national carrier by the end of this year would be counterproductive and would threaten the privately-owned airlines' interests.
“In the overall scheme of things, 'national carrier' can only result in a huge distortion to the current market and will be a huge drainpipe to government’s treasury," Iyayi said.
AON also called on Abuja to limit the number of international gateways foreign carriers could use to access the Nigerian market.
“AON’s position is that any foreign carrier should be restricted to only two points of entry into the country and explore interline options with domestic airline operators should it become necessary for expansion so as to protect capital flight and the jobs of our ailing Nigerian youths,” it added.
