Air Peace, Other Aviation Companies On Verge Of Tax Exemptions

Nigerian domestic airlines are struggling to survive the effects of the COVID-19 pandemic and lockdown measures on their revenue generation, but the Nigerian government is offering a bailout fund which the House of Representatives described as grossly inadequate. The lawmakers are considering tax exemptions for Air Peace and other stakeholders in Nigeria's aviation industry.

Air Peace, Arik Air, Overland Airways, and other Nigerian domestic airlines had resumed flight operations after more than three months out of operation. The local airlines lost significant revenue, which the Nigerian aviation estimated to be NGN20 billion each month of the lockdown.

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This has led to a financial burden on Nigerian aviation as a whole, resulting in the need for NGN50 billion according to the House of Representatives, but the government offered NGN4 billion as a bailout fund to the airlines.

This doesn't sit well with the House Committee on Aviation, and the stakeholders and lawmakers have made demands of theirs.

Lawmakers Demand Tax Exemptions For Aviation Industry

Apart from demanding an increase in the aviation bailout funds, members of the House of Representatives are also requesting that the government exempts the aviation industry from Value Added Tax and import duties on imported spare parts. This was highlighted after the aviation stakeholder meeting with the lawmakers.

The Chairman of the committee, Nnolim Nnaji, said to Journalists, "As a parliament, we are going to look into these demands and, more especially, to find out why the Nigeria Customs Service would not respect the President’s Executive Order on duty exemption and other palliatives meant to lighten the burdens of the airlines.

"The multiple entries for foreign airlines is equally an important concern raised by the operators which must be looked into. The aviation sector requires huge capital for infrastructural development." He said, adding that, “The Federal Government’s N4bn bailout to the airlines and some palliatives to the agencies (not yet released) is too small.

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"The airlines need at least N50bn bailout funds to cushion the coronavirus effect. We are requesting that other mechanisms should be introduced as a support to avert the collapse of the aviation sector." Nnaji said, as the House of reps also questioned the over regulation of the aviation industry.

Chairman of the Senate Committee on Aviation, Smart Adeyemi, said import duties on imported spare parts by airline operators should be cancelled, while the aviation sector shouldn't be made to pay VAT.

Meanwhile, Adeyemi said Airline operators were trying to sidestep the Federal Government in their bid to maintain their aircraft.