Airlines to Save N11.6b Yearly From Removal of VAT


Enterprise Television- Airlines to Save N11.6b Yearly From Removal of VAT

The planned review and removal of the mandatory Value Added Tax (VAT) on all air travel tickets issued in the aviation sector will save local airlines at least N11.55 billion in revenue yearly.

Stakeholders have commended the proposed move, describing it as a step in the right direction to save the local airlines from the burden of multiple charges allegedly suffocating the carriers.

Figures made available by the Nigeria Civil Aviation Authority (NCAA) show that local carriers transported no fewer than 7.7 million passengers in 2017. At an average of N30, 000 per ticket, the carriers accumulated N231 billion of which five per cent VAT was in excess of N11.55 billion.

The Chairman, Aircraft Operators of Nigeria (AON), Capt. Mohammed Joji, said the removal of VAT will be in the best interest of not only the passengers but the airlines in the areas of spare parts importation, payment of charges to regulatory agencies like NCAA and Nigeria Airspace Management Agency (NAMA) and helping the airlines to compete favourably with their counterparts on the African continent.

Among the charges for further review are passenger service charge of N1000 per ticket on local route, charter sales charge, aircraft inspection fees, simulator inspection fees, landing charges, parking charges and terminal navigational charge.