Modupe Gbadeyanka
By Modupe Gbadeyanka
The federal government has been advised to consider exempting the aviation industry from the payment of customs duty and value added tax (VAT).
These exemptions would be for the importation of commercial aircraft and spare parts, according to the Senate, which debated the huge challenges facing the sector at the moment.
In March 2020, the federal government shut down the nation’s airspace as a result of the COVID-19 pandemic and operations were only allowed to resume six months after.
Even after the resumption, most airlines are struggling to operate at full capacity because of the various policies put in place to curb the spread of the virus. Some of them have asked for a bailout.
At the plenary on Tuesday, a member of the upper chamber of the parliament, Mr Adamu Aliero, moved a motion to look at the issues raised by operators in the industry.
He argued that the issues of multiple taxations, payment of import duty and commercial taxes raised by airline owners in Nigeria were genuine, calling on his colleagues to implore the federal government to take actions that would save the sector.
In his contribution, Mr Smart Adeyemi, threw his weight behind the motion, emphasising that “other countries gave bailout fund to their aviation sector” because the industry is key to the development of the economy.
“If airline operators say they can’t clear their goods because of VAT, then the government needs to look into that. The federal government should allow the aviation sector to be tax-free for at least three years,” the former president of the Nigeria Union of Journalists (NUJ), submitted.
At the end of deliberations, the federal government was asked to upgrade decaying infrastructures at the nation’s airports and fast-tracking the clearance of Aircraft-on-Ground (AOG), spare parts and facilitate the availability of jet air.
The government was also advised to fully implement the Executive Order on Zero Customs Duty and VAT on importation of commercial aircraft and aircraft spare parts and also implement the Executive Order of the removal of VAT and then eliminate multiple taxes, fees and charges on airlines.
The Senate also asked the Central Bank of Nigeria (CBN) to make foreign exchange readily and easily accessible for the sector and make interest rate a single digit for airlines which will reduce the cost of capital;
