Senate Directs Foreign Airlines to Remit 5% Surcharge

Posted by admin Legislature, Senate Wednesday, April 18th, 2012

The Senate Committee on Aviation yesterday at the public hearing on air fare disparity, directed all foreign airlines to pay back the five per cent of all Passenger Fuel Surcharge (PFS) to the federal government, insisting that the claim of ignorance on the part of the airlines was not excuse enough.

The committee had slammed the directive following the acceptance by the airlines that they had defaulted by not paying the five per cent statutorily required from all ticket sales.

They claimed ignorance of any aviation law which requires them to pay such percentage on ticket sales.

But according to the Chairman of the committee, Senator Hope Uzodinma, he said the federal government has been deprieved of its statutory payments by the non-payment of the levy by the airlines.

He further directed the Nigerian Civil Aviation Authority(NCAA) to immediately commence the recovery of the taxes from the airlines as soon as possible even as some committee members added that the refusal to pay the money amounted to tax evasion and should be treated as a financial crime.

“It is the opinion of this committee that the government is entitled to the five per cent of the PSF charged by the foreign airlines.”

He maintained that the PFS as revenue accruing to the airlines is taxable since it usually appeared in their account books as a major revenue source.

Although the airlines had argued that the PFS was charged by the airlines to cover for the cost of aviation occasioned by global increases in crude oil, the committee noted that the airlines never reflected in the value of the PFS any fall in the price of crude in the international market.

However, the foreign airlines, especially British Airways, Air France and KLM, advised the country to establish a national airline as a step towards boosting the aviation industry, adding that Nigeria should be able to run a national carrier despite the fact that some smaller African countries own national airlines with difficulty in management.

On the 5 percent charge, the General Manager of Air France-KLM Nigeria, Mr. Christian Herpi, said they were ready to comply with any extant Nigerian law requiring the airline to pay 5per cent from the PFS.

In same vien the British Airways Country Manager, Mr. Kolawole Olayinka, had also argued in the same line, assuring that it was ready to comply with the directive, provided it is a clearly spelt out legal requirement.

-Leadershipwp_posts