President Muhammadu Buhari on Tuesday, February 18, 2020, has forwarded to the House of Representatives three executive bills that seek to stop three aviation agencies from paying taxes to the government and remitting funds generated from their operations to the Federation Account.
The agencies include the Federal Airports Authority of Nigeria, FAAN; Nigerian Airspace Management Agency, NAMA, and Nigerian Civil Aviation Authority, NCAA.
The prayer of the NCAA Bill, especially, contravenes sections 162 and 80 of the 1999 Constitution, which compel all aviation agencies of government to remit revenue generated to the Federation Account.
Copies of the bills exclusively obtained by journalists assent to the House of Representatives and Senate, are to repeal Acts setting up the Nigeria Civil Aviation Authority, NCAA, the Federal Airports Authority of Nigeria, FAAN and the Nigeria Airspace Management Authority, NAMA and to reenact fresh laws to give the agencies more regulatory and financial powers.
The bill that seeks to repeal the NCAA Act, titled “Civil Aviation Bill, 2019”, states in section 21(3): “Notwithstanding the provision of any other law, policy or circular in force, any fee imposed by or on behalf of the Authority, shall not be subject to any deduction by or remittance to any other body.’’
It goes ahead section 22(1) to state: “The Authority shall be exempted from the payment of tenement rates and income tax or any other tax in force”, adding that in section 2, “the provision of the law relating to the taxation of the income of any company or contribution to any trust fund shall not apply to the Authority.”
The new NCAA law also seeks to impose a 5% tax on sales of air tickets by airlines in the country.
The proposed law states in section 23(1): “There shall be a 5% of airfare, contract, charter, and cargo sales charge, payable to the Authority which charge shall apply on all International and domestic air transportation originating in Nigeria, irrespective of place of issuance of air ticket or execution of the contract of carriage.”
“The 5% of airfare, contract, charter, and cargo sales charge shall be chargeable on the total amount paid by a passenger for an airfare, in a contract relating to carriage of persons or goods for hire and reward in the case of air transportation not involving the issuance of an air ticket, paid for charter flight, and of the cargo sales.
Hattip to Vanguard
