Airline Operators Seek VAT Waiver, Subsidy On Staff Salaries
Airline Operators of Nigeria (AON) on Tuesday outlined possible areas of palliatives to cushion the effect of the lockdown on domestic airlines. Among the “low hanging fruit palliatives” which the operators want the Federal Government to consider is the Presidential Executive Order on Removal of VAT from all forms of transportation.
The association, in a statement, lamented that domestic airlines remained the only sub-sector in the transportation sector still paying VAT. Our correspondent reports that the removal of VAT for domestic airlines had been approved since 2018 but more than one year after, the waiver is yet to be implemented.
Minister of Aviation, Senator Hadi Sirika had, prior to the increase in VAT from five percent to 7.5 recently, assured that the ministry is “liaising with relevant MDAs to ensure the smooth implementation of the Presidential Order”.
Now that the industry is at a standstill following the suspension of flights operations because of the COVID-19 pandemic, the AON is revisiting the call for removal of VAT as part of the post-COVID-19 palliatives for airlines.
It would be recalled that the AON had said domestic airlines lost over N360bn since the suspension of flights on March 27.
In addition, the association called for suspension of all NCAA, FAAN, and NAMA charges for domestic operations within the country for 180 days.
Other fiscal palliatives the operators are canvassing include subsidy for payment of workers’ salaries at least to cover six months, support towards augmenting insurance premiums which are dollar denominated as well as augmenting payment for international leases and rentals on the over 120 grounded commercial aircraft that must be paid.
The operators also demanded access to forex at first tier rate. The group stated: “We believe the above measures are practical steps that will be a win-win strategy for all players in the sector and that will jumpstart the wheel of the Nigerian economy to keep moving as it will cushion the impact on the financial exposure of the Nigerian economy.”
“It is our firm conviction that it is better to keep the aviation industry going today than to kill the goose that lays the golden egg at the expense of over 251,000 Nigeria aviation jobs and recovery of our fragile economy today”, it added.