Nigerian airline operators and the Nigeria Civil Aviation Authority (NCAA) have disagreed sharply over the number of taxes, levies, fees and charges imposed on airlines operating in the country.
While airline operators claim they are burdened with as many as 54 different taxes, fees and charges, the NCAA has rejected the description, insisting that only about four statutory tax or ticket-related charges should properly be regarded as taxes.
The disagreement came to the fore at the 30th Annual Conference of the League of Airport and Aviation Correspondents, where stakeholders discussed the challenges confronting Nigeria’s aviation industry.
Airline operators argue that the numerous payments demanded by government agencies and other bodies significantly increase their operating costs and ultimately affect the price of air tickets.
According to the operators, the payments involve several agencies, including the NCAA, Federal Airports Authority of Nigeria (FAAN), Nigerian Airspace Management Agency (NAMA), Nigerian Meteorological Agency (NiMet) and the Federal Inland Revenue Service (FIRS).
They maintain that whether the individual payments are technically described as taxes, levies or charges, they represent financial obligations that airlines must meet in order to operate.
However, the NCAA has disputed the use of the “54 taxes” description.
The authority’s representative, Esther Ajijola, explained that airlines and regulators were effectively using different definitions when counting the payments.
She argued that several of the items being presented by operators as taxes are actually fees, service charges or operational costs, and should not be classified as taxes imposed on passengers or airlines.
The NCAA therefore maintained that the number of applicable statutory tax and ticket-related charges is far lower, with the authority putting the figure at about four.
The distinction has become important because airlines say the cumulative burden of government taxes, regulatory fees and aviation-related charges makes it increasingly difficult for indigenous carriers to remain profitable.
The operators contend that the multiple charges add to the cost of doing business and are eventually reflected in the fares paid by passengers.
The NCAA, however, appears to be saying that the debate should focus on the nature of each payment, rather than simply adding every government-related fee or airline operating expense together and calling the total “taxes.”
In other words, the two sides may not necessarily be disputing the existence of dozens of separate financial obligations. Their major disagreement is over how those obligations should be classified.
The controversy has nevertheless renewed calls for greater transparency in Nigeria’s aviation sector, particularly on the various charges that airlines pay and how much of those costs are eventually passed on to passengers through ticket prices.
