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FG loses N3.2billion to illegal charter airlines

By on May 5, 2013

The Federal Government is losing at least N3.2bn annually in taxes revenue to the activities of illegal chartered airlines in the country, investigation by SUNDAY PUNCHhas shown.

Airline industry sources said about 50 aircraft were currently carrying out illegal charter services in the country.

According to the sources, most of the illegal charter airlines are based at the Nnamdi Azikiwe International Airport, Abuja and Murtala Muhammed International Airport, Lagos.

The illegal charter airlines, it was learnt, often carry rich Nigerians, especially business moguls, politicians and political office holders.

It was further gathered that most of the charter planes often fly their wealthy clients to various parts of the country, including cities where scheduled commercial airlines hardly operate.

The illegal charter airlines also fly their clients to some Africa nations, especially countries in the West Coast.

The chief executive officers of some domestic airlines familiar with the situation estimated that the government was losing not less than N3.2bn ($20m) annually to the activities of the illegal charter airlines.

A CEO, who pleaded not to be named because of the sensitive nature of the issue said, “Let us assume each of those 50 illegal chartered planes operating in the country does 500 hours of flight every year. On the average, they charge their clients $8,000 per hour, depending on the type of aircraft. Now, if you multiply $8,000 by 500 hours, you have $4m.

“If you multiply the $4m by 50 aircraft, you have $200m (N31.6bn).  About 10 per cent of that amount should have gone to the government as tax. So, government is losing about $20m or N3.2bn.”

It was gathered that most of the illegal charter operators were foreign companies, which in partnership with some local charter airlines, bring in foreign-registered planes to Nigeria to carry out charter services.

A top government official familiar with the development but pleaded anonymity said, “Most of these illegal chartered planes are foreign-registered. They come into the country under the guise of private flights, but they are actually doing commercial flights all over the country, carrying big men from one place to the other.

“They partner with some local operators by putting them under their Air Operator Certificates, but they are not actually under the Part ‘G’ of the Nigerian Civil Aviation Authority, which authorises them to do the charter services legally. Government is not getting anything from their operations.”

The Chief Executive Officer, Finum Aviation Services, Mr. Sheri Kyari, advised the government to address the situation by formalising the illegal operators’ activities so that it could get the necessary revenue from their operations.

He said, “Government should allow the regulatory authority to do the correct thing. It is either government gives them the right registration and allow them to pay taxes or stop them out right.

“If not, all these foreign companies will continue to bring in aircraft into the country and do charter and go away without paying a dime. So, government should formalise them and give them time to comply, failure which it can now get them prosecuted.”

Meanwhile, the Ministry of Aviation has started addressing the situation in the General Aviation (private jets) Policy.

In the policy, unveiled on Friday, government announced an arrangement that will formalise the activities of the illegal charter plane operators so that about 10 per cent of their revenue will go to the government’s coffers.

 

 

 

 

[Punch]