FIRS Will Ground Airlines Over Tax Evasion


  • The Federal Inland Revenue Services (FIRS) is set to stop airlines that have failed to pay their Value Added Taxes (VAT) by the middle of this month (August) from operating in the country. Acting Executive Chairman, FIRS, Sunday Ogungbesan, disclosed this at an interactive session with the media at the weekend. This new ultimatum has further confirmed the woes of virtually all the airlines, which last week were threatened by the Nigerian Civil Aviation Authority (NCAA) with a blacklist for refusing to remit the five per cent Passenger Service Charge (PSC) they have been keeping to themselves.

“From mid August, airlines that have not paid their VAT will not be allowed to fly. FIRS can now track airlines’ VAT payment online,” the FIRS boss said. Although, he did not disclose the names of the debtor airlines or amount of money they owed, there are indications that virtually all the carriers owe the agency over N12 billion or more according to airline official who spoke to New Telegraph on condition of anonymity. Three years ago, FIRS had raided the premises of Arik Air and Air Nigeria for their failure to pay their VAT.

  • They arrested top officials of the carriers. While Air Nigeria’s office was locked for owing N4.8 billion, Arik suffered similar fate for owing about N3.4 billion, which the airline disputed. FIRS’ Debt Enforcement and Special Prosecution Unit said that the government had to arrest the airline’s boss for interrogation with a view to recovering 2011 and 2012 tax arrears owed by the airline. It stated that the refusal to deduct and remit taxes as well as failure to file tax returns by the company amount to criminal offences.
  • Air Nigeria was also alleged to have forged a Tax Clearance Certificate (TCC), giving it a clean bill of health. The airline management however, explained that the monies being sought by FIRS then were those owed during the period the airline was operating as Virgin Nigeria under the supervision of British billionaire, Richard Branson. Ogungbesan disclosed that the Federal Government has 37 revenue generating agencies, lamenting that of the 450,000 corporate entities in the country, only 120,000 firms pay taxes.
  • Source: New Telegraph

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