The Airline Operators of Nigeria has commended the Federal Government for issuing an Executive Order for the removal of Value Added Tax from air transportation.
According to the AON, following the Federal Executive Council meeting of June 6, 2018, the Federal Government ordered that VAT should be removed from all forms of shared transportation.
“This presents a veritable opportunity for the aviation industry to immediately take advantage of the decision to expedite a White Paper to that effect. It is our prayer that President Muhammadu Buhari will go a step further to encourage the National Assembly to pass this Executive Order into law as quickly as possible,” the AON Chairman, Capt. Nogie Meggison, said in a statement on Wednesday.
He stated that the decision would go a long way to encourage more Nigerians to fly and put the airlines on a positive footing to grow the economy and contribute to the country’s Gross Domestic Product.
Meggison said, “We as Nigerians have been crying out for decades now for discussions on the immediate removal of VAT from domestic air transportation in line with global best practices, but we have barely been heard over the years. VAT is an added burden on our passengers who have limited disposal funds and have reached their elastic point in this difficult time in the nation’s economy.
“This adversely affects the sector by reducing the number of those who can afford to travel by air due to high fares in this tough economic time. This has been shown to be true according to a recent report by the Federal Airports Authority of Nigeria that passenger traffic dropped by 27 per cent in 2017 and by another seven per cent in the first quarter of 2018, making it a total of 34 per cent drop in passenger traffic within a span of one year.”
He stated that VAT on commercial air transportation was a huge departure from what obtained worldwide and an increased burden on Nigerian travellers.