Great Tension As President Muhammadu Buhari Receives Yet Another Threat Message, His Latest Policy Gets Thrown In The Dirty Gutters

By Joshua Amaugo June 1, 2018 17:44

Great Tension As President Muhammadu Buhari Receives Yet Another Threat Message, His Latest Policy Gets Thrown In The Dirty Gutters

As the 2019 general elections draw nearer, Airline Operators in Nigeria, have threatened to boycott President Muhammadu Buhari’s policy on Value Added Tax, VAT, as they said that members will no longer pay, as from June 14, 2018.

Post-Nigeria gathered the group, on Thursday, May 30, said the decision was taken after deliberations by the Chief Executive Officers, CEOs, of Airlines in the country.

It said: “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.

“Also, Nigerian Domestic Airline travel is the only mode of transportation paying VAT in the country today, as Road, Rail, Marine, and International Airlines, do not pay”, the group lamented.

Speaking further, it said that Domestic Airline travel was the only mode of transportation that was subjected to the payment of VAT, adding that, its imposition was creating a suppression of Domestic Airline travel demand, resulting in the carriers not being able to optimally utilize their Aircraft assets, and more importantly, creating a market distortion.

“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 subsidize our competitors against those that are making payment, is unfair.”

Recall that the Chairman of the Revenue Mobilization Allocation and Fiscal Commission, RMAFC, Shettima Gana, had in 2016, called for an increase in the five percent Value Added Tax, VAT, operational in the country, to between 7.5 and 10 percent, to shore up national revenue base.

He argued that at 5 percent, Nigeria has one of the lowest VAT rates in the world, while South Africa and Niger have 14 and 19 percent VAT rates, respectively. Togo, Senegal, Guinea, and Chad, were said to have their VAT rates pegged at 18 percent.

President Buhari adhering to RMAFC’s suggestion, had in February 2, 2017, approved a new tax regime, which raised taxes on luxury goods.

According to Mrs. Adeosun, the policy will see the Value Added Tax on luxury items, like champagne and yachts, etc, increasing from its current five percent, among other policy changes.

With the policy partially implemented, as some organisation were treated as sacred cows, while others were made to pay through their nose, the Airline Operators of Nigeria, AON, have condemned President Buhari’s act of injustice, while threatening to boycott his policy.

The President’s action according to Economic Experts, is capable of affecting the nation’s economy adversely, as it will also dent his integrity status ahead of the 2019 election year.

The AON, also stated that the Federal Government’s plan to float a national carrier, was counterproductive and against the interest of private entrepreneurs.

“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.

“In the overall scheme of things, the ‘national carrier’ can only result in a huge distortion to the current market, and will be a huge drainpipe to the government’s treasury.

“In this regard, therefore, we urge the Federal Government to provide clarity on the agenda, whether it is 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 for Aviation, has indicated that this Airline will commence operations on December 24, 2018.”

The Operators, speaking further stated that the national carrier model was no longer practicable worldwide, as it was in the 1970s, adding that, 80 percent of the Airlines in Europe were government-owned Airlines, and 98 percent had been privatized.

They however, urged the Federal Government to review its policies on the matters, and address the concerns raised in the position paper presented to the Presidential Task Force on Aviation, by the group.

The AON added that over 50 indigenous scheduled Airlines had existed in Nigeria, but only seven are flying today.

“The mortality rate of Airlines in Nigeria is exceedingly high. The owners of these defunct Airlines have all been success stories in other business endeavors, but not in aviation.”

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