Domestic airlines kick against national carrier, threaten to stop paying VAT

Domestic airline operators in the country have threatened that they will stop paying value-added tax from June 14.

In a statement released on Thursday under the aegis of Airline Operators of Nigeria, the operators said the federal government’s decision to float a national carrier is counterproductive.

“The AON has resolved that effective June 14, 2018, its members shall cease to make VAT remittances as doing so is unfair, as some airlines are paying, while some other airlines are not paying domestic VAT charges,” the statement read.

“The AON’s position is that the VAT on airline ticket sales for domestic carriers must be removed completely forthwith as road transportation, rail, marine and international air travel carriers are not subjected to VAT.

“Moreover, a situation whereby some airlines are paying VAT, while some other privileged airlines are not paying VAT, and the VAT which we pay is being used to subsidise our competitors against those that are making payment is unfair.

“The AON is at a loss as to the relevance and need of a national carrier at this point in time in the history of the nation.

“While 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 taxpayers’ money to float a national carrier in 2018 is not only counterproductive but inimical to the overall interests of the present crop of private entrepreneurs.”

AON said the national carrier will result in a “huge distortion to the current market” and be a “drainpipe to the government treasury”.

“In this regard, therefore, 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 the minister of state aviation has indicated that this airline will commence operations on December 24, 2018.”

Hadi Sirika, minister of state for aviation, has been conducting several meetings to see that the national carrier becomes a reality with the latest been with Boeing, aircraft manufacturing company.