5% of VAT in air transport yet to be removed by FG

03/21/2019

Posted by: Joshua-Philip Okeafor

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The local aviation sector raises questions about the presence of VAT in the sector nine months after the Federal government announced a stop to same. Check details here!

According to the Managing Director of Med-View Airlines, Muneer Bankole, nine months after the government made a mandatory interruption of the five per cent Value Added Tax (VAT) in air transport, airlines are yet to see the implementation.

This statement was made on Monday by Mr. Bankole, in his own words:

“Nothing is being done in that direction as at now. All we are praying for is to have the relevant authorities do the right thing. The government would still need to talk to the Ministries of Finance, Budget, and other relevant bodies, including the National Assembly, to have it become a law and binding on all,”

It's important to pay taxes and vehicle registration fees at the right government agencies.

VAT-illustration

VAT in transportation is a no-go internationally

Last year June 2018, it would be recalled that the Federal Government of Nigeria had put a halt to the collection of VAT in all forms of transportation, in conformity with international standards, but since then nothing about it was said or done.

As confirmed by The Guardian, the Federal Inland Revenue Service (FIRS), which collects taxes on behalf of the government, claims not to be aware of such directive as at August, 2018 despite the Federal government taking that action since June.

Unlike other countries, Nigeria is the still the only country that charges VAT on air transport. According to the airlines, the airlines are in financial crises because the VAT in addition to thirty-six other fees, accounts for at least 40 percent of total revenue.

Plane-on-tarmac

Nigeria's aviation sector is threatened by VAT

The Managing Director of Med-View Airlines, Mr. Bankole added saying:

“Definitely, you know that commercial operation like airlines have international connection; you don’t pay VAT anywhere in the world. So, let us do the right things here. All these charges – VAT and taxes don’t apply to aviation because they don’t help the airlines’ business. That is why our airlines are nose-diving and government agencies just sit down looking.”

“They (regulatory agencies) should get out of this colonial approach. Every government agencies should go out, fend to get money and work as real service provider. That is the way to go. When you say you are committed to paying five per cent to this, four per cent to that, three per cent to another and so on, then you are still in the colonial era,” he said.

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Joshua-Philip Okeafor
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Joshua-Philip Okeafor

Joshua-Philip Okeafor

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Joshua, or KK as friends call him, is a Filmmaker, Writer and Director. A Christian, Joshua is a product of Nigeria’s foremost film school, the National Film Institute, Jos, where he majored in Writing/Directing. Joshua began his writing career at age 18 when an older brother gave him a four page outline of a children novel. Joshua intends to keep writing and directing. His screen name is sometimes Joshua Kalu Ephraim (Writing), and sometimes Joshua KK (directing).

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