Aviation Stakeholder Blame High Taxes For Lack Of Investments

Stakeholders in the aviation industry in Lagos on Thursday ascribed low investment in the industry, expensive airfares, and cargo fees to what they called exorbitant taxes and fees imposed on airlines, business owners, and other airport users.

They claimed that this was partially to blame for the exorbitant costs that airlines were charging.

They made these remarks at the Aviation Round Table Initiative’s Business Breakfast Meeting, which had as its theme, “Nigerian Aviation Sector Charges, Duties and Tariffs: Truly Exorbitant?.”

Mr. Taiwo Oyedele, the head of the Presidential Committee on Fiscal and Tax Policies, expressed alarm over reports that suggested bringing in products from China was less expensive than transporting them from Apapa port to the hinterland.

He observed that the export method was equally onerous, involving protracted certification and clearance processes in addition to a variety of charges, which encouraged some exporters to choose other channels via neighboring nations.

According to recent IATA discoveries, Lagos and Abuja airports are the most expensive in the world because of the numerous levies, taxes, fees, and penalties. Regardless of the veracity of this claim, he said, the perception of it is harmful and needs immediate adjustment.

 “Some reports indicate that carriers often opt to fly outbound cargo planes empty rather than incur exorbitant charges for loading goods from Nigeria to other countries.

“Similarly, expensive overnight parking has led to some airlines favouring neighbouring countries. To remain competitive regionally and on the global stage, we must address the burden of multiple agencies, complex paperwork, and a plethora of taxes and levies.

“As a nation, we cannot aspire to be competitive while at the same time burdening businesses with complex processes.

“We must cease taxing seeds and instead, foster an environment that encourages businesses to thrive, bearing fruits that we can tax.”

“In this pursuit, the Presidential Fiscal Policy and Tax Reforms Committee was established, with a clear mandate to harmonise taxes and revenue collection agencies, promote business growth, and cultivate a competitive landscape, among others.

“On behalf of the PFPTRC, I assure you of our readiness to support the aviation sector in overcoming these challenges.

“Your insights and recommendations from this conference will not only shape our collective understanding but also guide our decisions as we work towards crafting appropriate policy measures and interventions to achieve a vibrant and globally competitive aviation industry for our dear country,” he said.

The meeting was called for in response to disputes that followed certain attendees at local and international aviation events claiming that fees at Nigerian airports, particularly those in Abuja and Lagos, were among the most expensive in the world. This was stated by Air Commodore Ademola Onitiju (rtd), President of ARTI, in his opening remarks.

He noted that, like most matters worthy of discussion, the ARTI made the decision to assemble a reputable group of informed people and organizations to examine the topic of fees and tariffs that are relevant to the industry.

During his paper presentation, Dr. Gbenga Olowo, the immediate past president of ARTI, one of the guest speakers, questioned if the airlines collected revenue, pointing out that commercial aviation, especially in Nigeria, had not been given priority by previous governments.

 “IATA has severally described airlines as cash-cow, meaning that they collect cash from one party and deliver to the other.

“This is truly so, especially in Nigeria when you consider the revelations during the just concluded 55th Annual General Assembly and summit of African Airlines Association (AFRAA) in Kampala, Uganda which rose with a statement by IATA that Lagos and Abuja are the most expensive airports in the world.

“Passenger Service Charge in Nigeria is $100 per passenger, while Doha, the best airport in the world, it is $44 and Dubai is $40.

“It is amazing that rather than pay attention to the myriads of problems, I read lately that the federal government allocated N5.5 billion ($6.5 million) to develop new airstrips and repair abandoned ones. Why build only to be abandoned?

“It is simply a question of priority and where the driver’s interest lies. What about millions of dollars expended annually by government to fund religious tourism to Jerusalem and Jeddah?” he asked.