Nigerian airlines groan over 34 levies, taxes

Nigerians are faced with 34 charges levied against them by government agencies and organisations in the aviation sector that have made the nation’s aviation rank among the highest taxed sector in the world, New Telegraph has learnt.

A document made available to this newspaper by a source in the Ministry of Transportation indicated that the charges and levies are apart from the five per cent Value Added Tax (VAT) paid into coffers of the Federal Government through the Federal Inland Revenue Service (FIRS).

The document, which was presented as a new order to the operating airlines in the country last February, spelt out charges and levies collected by agencies such as the Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Agency (NCAA), Nigerian Airspace Management Agency (NAMA) and the operator of the Murtala Muhammed Airport Two (MMA2), Lagos, Bi-Courtney Aviation Services Limited (BASL).

The levies, according to the document, are divided into aeronautic and non-aeronautic revenues and are added to charges collected from passengers as air tickets. Further investigations re-vealed that 21 of the charges are paid into the coffers of FAAN, six are paid into NCAA and NAMA collects three while Bi-Courtney collects four of the charges from the airlines that operate at its terminal.

The breakdown of aeronautic charges included aircraft inspection, which is tickets and Duty Tour Allowance (DTA) paid to the coffers of NCAA. The DTA depends on the country the aircraft is being inspected, but a source said airlines pay at least $10,000 to the agency for each inspection of its aircraft. Also, landing charges are divided into two – day and night.

During the day, airlines pay N25 per kilogramme of the aircraft weight while they are charged N37.5 per kilogramme of the aircraft at night. FAAN collects the charge from airlines.

Also, FAAN collects N315 per weight of aircraft after 30 hours from airlines as parking charge while the agency also collects between $40 and $50 from airlines for using the Avio Bridge. For en-route charge, FAAN charges $70 from airlines on international routes while it collects N2,000 for carriers on domestic route.

Indigenous airlines are compelled to pay $75 to NAMA as a charge for over-flight, it equally collects $195 from airlines that operate international or regional flights outside the country, while N6,000 is remitted by indigenous airline operators for the same terminal charge. The aeronautic agency also collects clearance fee for indigenous airlines.

Besides, N2,500 per passenger is remitted to the purse of BASL as Passenger Service Charge (PSC) for any air traveller airlifted by airlines at the terminal. The terminal operator also collects $50 from airlines for using its avio bridge while it collects another $50 as extended avio bridge usage.

Also, BASL collects $00.50 from operators as check-in counter fee The breakdown of non-aeronautic charge indicates that NCAA collects five per cent of total fare from airlines as Ticket Sales Tax (TST), another five per cent each as Import and Export Charges for domestic operator.

The regulatory authority also charges airlines 10 per cent each as Import and Export Royalties. Also, FAAN collects N1000 for domestic operations and $50 for international operations as Passenger Service Charge (PSC), charges N7 per kilogramme as Ports Charge. Same agency collects N5 per kilogrammme as Export Charge, N20 per kilogramme on Courier/ Tarmac/ Pre-Release and N5 per kilogramme as Air Cargo.

Other charges from FAAN are N5 per kilogramme as shipment, N50 per kilogramme as Terminal Charge while it equally collects 5 per cent on turnover on behalf of the Ministry as Concession Fee, 20 per cent or rent as service recovery charge’ N500,000 per office as processing fee, PHCN charges and 75 per cent as electricity charge, N2.50 per litre as fuel surcharge and between 125,000 to N150,000 in Port Harcourt, Lagos and Abuja as apron pass from each of the indigenous airlines.

A source close to one of the airlines however told our correspondent that with charges imposed on the carriers, the airlines in the country would continue to die in droves.

He insisted that for the airlines to continue to remain in the air, government should reverse most of its policies, especially the charges imposed on the carriers. The source said: “Look at the charges different government agencies are collecting from us. In all, we have 34 levies, taxes and charges paid into different coffers of government agencies.

Yet, they expect us to operate profitably and remain in the air. It’s not possible. “Other governments all over the world give their indigenous carriers some leverages. Just imagine, NAMA collecting en-route charges from airline operators. Where is that done? At times, charges collected by FAAN are repeated by NAMA.”

The Chief Operating Officer (COO), Med-View Airline, Lookman Animashaun, an engineer, identified multiple taxation as the major challenge the airlines in the country are confronted with. He explained that 30 to 40 per cent of ticket sales go for taxes and levels while another 40 per cent is expended on Jet A1 purchase.

“So, how do you want them to make profit and the ticket you are selling is limited because of the cash crunch in the country, you cannot just increase your ticket fares as this will put lots if passengers into problems.

“If the multiple taxation, charges and high cost of fuel are not addressed, the nation’s airlines will continue to go under. As at today, fuel is going for N240 to N250 in Lagos and this is apart from other airports like Kaduna and others, it is between N255 and N265 per litre in those states. “How much are we selling one hour ticket to passengers? I learnt some airlines are selling tickets at N18,000 to Abuja.

I don’t know how they want to breakeven.” Also, the Chairman of Airline Operators of Nigeria (AON), Capt. Nogie Meggison said that multiple charges is one of the militating factors against the growth of operators in the country.

He claimed that domestic airlines on the average, pay about 35 to 40 per cent of a ticket cost as taxes and charges, stressing that the system in the country is continuously manipulating, feasting and pushing the financial envelope of airlines by inflicting multiple taxes, charges and levies to the extent that airlines are now groaning under the pressure and some are going insolvent.

159 total views, 5 views today

Related posts

Leave a Reply