Fresh disagreement has emerged between the Nigeria Civil Aviation Authority, NCAA, and the Airline Operators of Nigeria, AON, over the amount of taxes, fees and charges imposed on airlines operating in the country.
While the NCAA insisted that, apart from taxes imposed on each ticket, other charges were cost elements associated with aviation operations, AON maintained that airlines were subjected to 54 lines of taxes, fees and charges, many of which emerged after the various agencies evolved from the defunct Federal Civil Aviation Authority, FCAA.
NCAA also expressed worry that airline operators were creating the impression that they were being heavily taxed, saying the five per cent Ticket Sales Charge, NCAA, for instance, was calculated on a neutral unit of construction, which comprises only the base fare and fuel surcharge.
Representatives of both bodies spoke as panellists at the 30th Annual Conference of the League of Airport and Aviation Correspondents, LAAC, themed ‘Towards Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth,’ held in Lagos.
There are four – NCAA DG
Speaking at the event, Director-General of the NCAA, Capt Chris Najomo, represented by General Manager of Allied Services & Economic Oversight at the NCAA, Esther Ajijola, said: “Some days ago, I was with one operator.
“After reading an article which stated that there are 54 taxes on tickets, I asked the operator. I called the head of commercial, ‘Can you verify for me? I have a ticket of N114,000, how much is the charge?’ We started calculating.
“On that ticket, Federal Inland Revenue Service, FIRS, charges 7.5 per cent. If you are flying from Bi-Courtney (MM2), you pay N7,000. If you are flying from GAT, you pay N2,500 as your passenger tax.
“And then you pay the five per cent to NCAA, which is four basic on the ticket. Every other tax which you are referring to are your cost elements that come from aviation.
“The impression is that the industry tax them (operators) so heavily. But the five per cent of NCAA, for example, is calculated as a neutral unit of construction, which is your base fare, plus your fuel surcharge only. That is where we take our five per cent.
“When we look at charges, we know that these charges are towards cost recovery of infrastructure. When you look at taxes, you are talking about the national development of a nation. And there you look at what leads to the airport. You are looking at the road, you are looking at the water, you are looking at the energy and that’s where you have your tax.
“But for a government to put revenue generation ahead of safety, ahead of security and customer satisfaction, we are all customers of the aviation industry, I don’t think any government will want to do that.
“But the truth is that aviation is a business. Civil aviation is a business. Civil aviation business is highly expensive and capital-intensive. Human resources and expertise are needed in civil aviation. Civil aviation calls for infrastructure that cannot be put on our sandy roads.
“If you are talking about an aircraft, you want to look at the environment in which you want to put your aircraft. And all this comes as a cost element. Our airlines desire more. We know the challenges are around globally. Yet we cannot compromise not taking revenue. Tax and charges to sustain the aviation industry.”
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