Airline operators to pack up on tax issues.

THE face-off between the Nigeria Civil Aviation Authority (NCAA) and airline operators over the imposition of new tariff by the aviation regulatory body has deepened, as the airlines are planning to take their services out of the country in a bid to remain in business.
Some of the operators on Wednesday described the fresh imposition of $4, 000 and $300, 000 by the NCAA for foreign registered and Nigerian carrier per trip as not in tandem with global practice and challenged the agency to name countries where such taxes exist.
They accused the NCAA of scaring people away from investing in the country and described the fresh fees as “outrageous, multiple taxation and illegal.”
Virtually all the operators, including private jet owners engage in unscheduled (charter) operations and for every take-off their aircraft make, they are charged such exorbitant fees.
A source, who works for a major domestic airline that handles the operations of many private jets, said owners of private jets are already kicking against the new policy and had indicated their plans to meet with the Minister of Aviation on the need for her to rescind her decision which they said would greatly hurt the sector.
Aside this fresh charge, the operators are also to pay navigational, landing and parking charges, passenger service charge and 5 per cent of the total revenue made if the flight is chartered.
For clarity, if a client charters an airplane at the cost of N4 million or more, 5 per cent of that amount and another 5 per cent Value Added Tax (VAT) go to the NCAA.
Aviation expert and Manager for Chanchangi Airlines, Mohammed Tukur said: “Some people think this industry must be destroyed at all cost and this will negatively affect job creation as these airlines may decide to close shop and move their operations to Ghana where the charges are not only moderate but reasonable.
“When it comes to this, everybody is involved. Aero, Arik, Chanchangi, IRS, Dana are involved. You have to make aviation conducive so that there would be job creation. This is no longer the transformation that the industry yearns for, but one that could cripple the sector. I am sure the NCAA must have been forced to take this type of draconian retrogressive policy that takes us nowhere.”
Tukur noted that the irony of the action is that the Nigerian Airspace Management Agency (NAMA) that should champion this cause because it concerns giving clearance for take-off of airlines, “had tactically recoiled into its shell and distanced itself from this policy”.
Meanwhile, the NCAA has filed a suit in the Federal High Court, Lagos challenging the reluctance of foreign and Nigerian registered airlines to pay some stipulated fees for their operation.
By an originating summon dated September 23, 2013, the plaintiff (NCAA) prays the court for the determination of whether by true construction of Sections 30 (2) (q) and 30 (5) of the Civil Aviation Act of 2006, the plaintiff is empowered to impose fees on all foreign and Nigerian registered aircraft engaged in non-scheduled operations conveyed vide order of August 28, 2013.
It also seeks to know whether the plaintiff acted within the laws empowering him in that behalf to impose the said fees.
In the originating summons, with suit number FHC/105/313/13, the plaintiff urged the court to summon the operators within eight days “of this summons on them inclusive of the day of such service and cause an appearance to be entered for them.”
The agency, however, deposed that the payment of the said fees was to take effect from the date of the issue of the order.
Also deposed to, is that airline operators have refused and or neglected to pay the said fees, and that their continued refusal to obey the order of the plaintiff is illegal.