THEME:
NIGERIAN AVIATION SECTOR CHARGES, DUTIES AND TARIFFS: TRULY EXORBITANT?
PROTOCOL …
Thank you for inviting me as your keynote speaker at this event. Even though the timing of the program is not convenient for me due to my other commitments, with the persistence of the organisers I had to find a way to participate one way or the other. Apologies that I couldn’t be with you in person. In fact, I need to exit within the hour to attend to my next engagement, but I am glad to note that Prof. Abiola Sanni who chairs our National Tax policy subcommittee is one of the panel speakers for this session.
I would like to acknowledge the pivotal role our ports play as the gateways to our economy. Beyond serving as entry points, our ports offer a glimpse into the core of our nation, who we are and what we stand for —from regulatory intricacies to how much of an investor-friendly nation we are, the efficiency or otherwise of our processes, and our commitment to innovation and creativity.
The aviation sector, as a cornerstone of our economy, contributes significantly to our GDP, employment generation, and foreign exchange earnings. Yet, we must acknowledge that there is enormous untapped potential for us to elevate our position to a leading player in Africa and one of the best aviation jurisdictions in the world.
Undoubtedly, challenges abound from our seaports to our airports. Disturbing reports indicate that it is more expensive to transport imported goods from Apapa Port to the hinterland than it is to bring them from China. The export process is equally arduous, with prolonged clearance and certification procedures, coupled with an array of levies, prompting some exporters to opt for alternative routes through neighbouring countries.
Recent revelations from IATA rank our Lagos and Abuja airports as the two most expensive in the world, no thanks to the endless levies, taxes, fees and charges. Whether or not this assertion is accurate, the mere perception of it is detrimental and demands our urgent attention.
Equally, a recent news report credited to FAAN indicated that at least 15 airports in Nigeria are not viable. Sadly, beyond the huge capital outlay, we also need to maintain these airports and airstrips at huge costs despite our lean resources. This places undue pressure on the few viable airports, particularly the Lagos and Abuja, perhaps contributing to the myriad of taxes and levies. Solving these challenges requires a departure from the mindset that created the problems in the first place.
Some reports indicate that carriers often opt to fly outbound cargo planes empty rather than incur exorbitant charges for loading goods from Nigeria to other countries. Similarly, expensive overnight parking has led to some airlines favouring neighbouring countries. To remain competitive regionally and on the global stage, we must address the burden of multiple agencies, complex paperwork, and a plethora of taxes and levies.
As a nation, we cannot aspire to be competitive while at the same time burdening businesses with complex processes. We must cease taxing seeds and, instead, foster an environment that encourages businesses to thrive, bearing fruits that we can tax. In this pursuit, the Presidential Fiscal Policy and Tax Reforms Committee was established, with a clear mandate to harmonize taxes and revenue collection agencies, promote business growth, and cultivate a competitive landscape, among others.
On behalf of the PFPTRC, I assure you of our readiness to support the aviation sector in overcoming these challenges. Your insights and recommendations from this conference will not only shape our collective understanding but also guide our decisions as we work towards crafting appropriate policy measures and interventions to achieve a vibrant and globally competitive aviation industry for our dear country.
We invite you all to join us for our virtual stakeholder consultation session for the aviation sector scheduled for Friday 15 December 2023 from 4-6pm.
Thank you all for your kind attention, I wish you a fruitful deliberation.
May God bless the Federal Republic of Nigeria.
