Aviation and shipping were the top focus as industry stakeholders led by Federal Inland Revenue Service (FIRS) and Pedabo Professional Services, expressed concerns over the impacts of multiplicity of charges, levies, and taxes in the sectors, stressing that there was need to address the situation for the sectors to grow.
They explained that unless the federal government and other stakeholders address challenges bedevilling the nation’s maritime and aviation sectors, projected benefits may remain elusive.
The experts insisted that adopting the same presumptive tax rate of six percent as in other industries may be counter-productive in the shipping and aviation sectors, adding that consolidation of accounting mechanisms as well as a single revenue authority remain sacrosanct for the country.
Speaking during thought leadership session for aviation and shipping sectors led by FIRS and Pedabo Professional Services, the Executive Chairman of FIRS, Muhammad Nami asked the federal government to block leakages in the accounting and revenue segments of the economy through consolidated accounting mechanism and a single revenue authority.
He noted that existing gaps provide run for leakages and limit revenue and accounting potential, adding that there was a need to consolidate or aggregate the country’s accounting mechanism to ensure taxes paid are accounted for by a single revenue authority in the country.
To him, the development would ensure that taxes collected on behalf of the government are remitted to fund budgetary allocations, social amenities as well as critical infrastructure.
Managing Partner, Pedabo, Ajibade Fashina said that the shipping and aviation sector can leapfrog contribution to Gross Domestic Product (GDP), if well managed.
Speaking on blocking the leakages in the country’s tax system to boost remittances, he said the law is certain and is being improved regularly.
“The Finance Act that is being reviewed on a yearly basis. They (FIRS) identify the leakages and loopholes, and they are blocking those loopholes, and that is what should be done.
“Maybe the government needs to think more about what the money is being used for. Who is collecting what? Why are so many of those funds, which more or less, form part of the revenue, not going into the national purse? I think those are issues that need to be addressed,” Fashina added.
With disputes on shipping and airline taxation between the Federal Government and some operators, a Partner at Pedabo, Killian Khanoba, stated, “Nigeria is not alone in the practice of exerting tax on container leasing and ancillary revenues. The dispute with the international lines on the matter is also not isolated to Nigeria.”
With over 16 agencies in the airports and sea in the country, Khanobanoted that shipping and aviation must not be treated with levity to attract flow of capital, goods and services.
He said: “Aviation and shipping sectors in Nigeria are characterised by multiplicity of charges, levies and taxes payable by operators. This must be addressed for the sector to grow. The Nigerian tax regime for the sectors obviously needs a makeover, to guarantee growth.”
Managing Consultant at Pedabo, Albert Folorunsho noted that the Federal government needs to include in extant regulations issues related to taxation for shipping companies operating within or around the country to simplify collection.
NCAA Urges Youths to Take Up Career in Aviation
The Director General, Nigeria Civil Aviation Authority (NCAA) Captain Musa Nuhu, has said that the regulatory body is committed to educating Nigerian youths to choose career in aviation to address the dearth of manpower in the sector.
Speaking at the 5th Explore Aviation Career Conference, which held in Lagos with the theme: ‘Harnessing the potential of the Next Generation of Aviation Professionals,’ Nuhu said, the industry was in dare need of adequate, competent and experienced workforce.
He said since the restart of flight operations after the Covid-19 lockdown, more airlines have commenced operations, increased their fleet and expanded their routes.
According to him, with this development and growth of the aviation industry, the scope of oversight activities of the NCAA have expanded.
Nuhu stressed that the regulatory body and the industry in general were suffering from lack of adequate specialised aviation professionals especially in the technical areas.
“Especially in the integral critical areas, it is important to know this is not peculiar to Nigeria but a global one especially with our inspectors in flight operations department,” Nuhu said.
He explained the career conference came at the right time as this would serve as a starting point in the process of identifying and training of young aviation professionals that would ultimately operate and manage the various sectors of the industry.
“We need to have the young people to get into the aviation industry, the industry is growing, we need you, excellent career to have a wonderful career, fulfilled career at the end of the day, we would all support you,” Nuhu added.
Convener of the conference, Joy Ogbebo, said the essence of the yearly conference was to bring the professionals and the aspiring youths together, discuss and ask questions, adding that the impact on the industry has been tremendous.
‘There was Moderate Rebound in September Passenger’s Demand’
The International Air Transport Association (IATA) has announced a moderate rebound in air travel in September 2021 compared to August’s performance. This was driven by recovery in domestic markets, in particular China, where some travel curbs were lifted following the COVID-19 outbreaks in August. International demand, meanwhile, slipped slightly compared to the previous month.
IATA explained that because comparisons between 2021 and 2020 monthly results are distorted by the extraordinary impact of COVID-19, unless otherwise noted all comparisons are to September 2019, which followed a normal demand pattern.
Total demand for air travel in September 2021 (measured in revenue passenger kilometers or RPKs) was down 53.4 per cent compared to September 2019. This marked an uptick from August, when demand was 56.0% below August 2019 levels.
Domestic markets were down 24.3 per cent compared to September 2019, a significant improvement from August 2021, when traffic was down 32.6 per cent versus two years ago. All markets showed improvement with the exception of Japan and Russia, although the latter remained in solid growth territory compared to 2019.
International passenger demand in September was 69.2 per cent below September 2019, fractionally worse than the 68.7 per cent decline recorded in August.
IATA’s Director General, Willie Walsh, said: “September’s performance is a positive development but recovery in international traffic remains stalled amid continuing border closures and quarantine mandates. The recent US policy change to reopen travel from 33 markets for fully vaccinated foreigners from 8 November is a welcome, if long overdue, development. Along with recent re-openings in other key markets like Australia, Argentina, Thailand, and Singapore, this should give a boost to the large-scale restoration of the freedom to travel.”