NEWS

Airlines to save N11.6b annually from removal of VAT, others

Published

7 years ago

February 12, 2018

The planned review and removal of the mandatory Value Added Tax (VAT) on all air travel tickets issued in the aviation sector will save local airlines at least N11.55 billion in revenue yearly.

The tax, which is five per cent of every ticket fare paid only by local passengers, has been scheduled for consideration and withdrawal at the Federal Executive Council (FEC) meeting.

Stakeholders have commended the proposed move, describing it as a step in the right direction to save the local airlines from the burden of multiple charges allegedly suffocating the carriers.

The operators have consistently raised concerns on the perennial challenges occasioned by multiple taxation in the system, especially VAT, that is rare in global aviation and even in other modes of transportation in Nigeria. Besides VAT and Passenger Service Charge (PSC) that cost 10 per cent of every fare, the airlines alleged payment of 35 other sundry charges that cumulatively rake off about 65 per cent of revenue made in the sector.

The relentless campaign against the “killing” taxes and charges regime, however, paid off at the weekend when the Minister of State for Aviation, Hadi Sirika, disclosed that a plan to remove the VAT, among others, had reached an advanced stage.

Sirika said in Lagos that the special committee of all stakeholders set up by the Federal Government to review multiple charges had submitted its report with a proposal for the removal VAT to align the industry with its counterparts in the world.

“We have gone very far. The report has been submitted and we are presenting the same to the government. One of the things we are considering is VAT. Since it is not chargeable on transportation, we are working hard to convince the government and I’m sure the government will be convinced to remove it and a few other things. We are preparing the final report for the government to take a final decision,” Sirika said.

Figures made available by the Nigeria Civil Aviation Authority (NCAA) show that local carriers transported no fewer than 7.7 million passengers in 2017. At an average of N30, 000 per ticket, the carriers accumulated N231 billion of which five per cent VAT was in excess of N11.55 billion.

One of the agencies represented in the taxes and charges review committee is the Nigerian Civil Aviation Authority (NCAA). The spokesman, Sam Adurogboye, said the proposal became necessary to align with international best practices.

The Chairman, Aircraft Operators of Nigeria (AON), Capt. Mohammed Joji, said the scrap of VAT in air transport sector was long overdue.

Joji recalled that VAT and its removal from air travel had been addressed since the era of the General Agreement on Tariffs and Trade (GATT) of 1947 and General Agreement on Trade in Services (GATS) that came into force in 1995. That explains why international carriers do not charge VAT on their ticket sales based on international agreements.

Joji, who is also the Managing Director of Skypower Express Airways Nigeria Limited, claimed that VAT Decree 102 of 1993, schedule three, under “Goods Except” actually exempted transportation by road, rail and water from VAT deductions.

“Erroneously, they (government of the day) left air transportation on the VAT list. When we demanded to know the reason, they said because aviation was high- profile, unlike other sub-sectors. But that is a bad argument. They don’t know that aviation is a catalyst for the economy. That is what we have been telling them all these years,” Joji said.

According to him, the removal of VAT will be in the best interest of not only the passengers but the airlines in the areas of spare parts importation, payment of charges to regulatory agencies like NCAA and Nigeria Airspace Management Agency (NAMA) and helping the airlines to compete favourably with their counterparts on the African continent.

Other stakeholders toed the path of Joji, though stressed the need for more taxes and charges to be taken off the airlines or properly harmonised without duplications.

Among the charges for further review are passenger service charge of N1000 per ticket on local route, charter sales charge, aircraft inspection fees, simulator inspection fees, landing charges, parking charges and terminal navigational charge.

Others are enroute charge, fuel surcharge, airport space rent, electricity charges, apron pass, ODC, registration fee, service recovery charge, processing fee, avio bridge, aircraft registration and processing fee.

The airlines also pay toll gate fee, VIP lounge, trolley service, clearance fee, check-in counter charge, courier/tarmac/pre-release charges, import charge (Dom), export charge (Dom), import royalty, export royalty, ports charge, exports charge, transhipment, and concession Fee.

Together, these charges eat deep into earnings, leaving the airlines with less than N10,000 on a passenger ticket sold at an average price of N30,000.

The Chief Executive Officer of Air Peace, Allen Onyema, who confirmed the heavy toll, said: “If this current regime of taxation is not removed, no airline will survive.”

MOVIES

Funke Akindele’s “Everybody Loves Jenifa” Rakes Box Office With ₦511 Million In Just 12 Days

Published

8 hours ago

December 24, 2024

Reporter

Everybody Loves Jenifa rakes box office with ₦511 million | fab.ng

Funke Akindele’s comedy film “Everybody Loves Jenifa” has shattered Nigerian box office records by earning ₦511 million within just 12 days of its release.

FilmOne, the film’s distributor, revealed that this remarkable achievement makes it both the highest-grossing Nollywood film of 2024. It is also the fastest Nigerian movie to reach the ₦500 million milestone.

“History Made! Everybody Loves Jenifa smashes records with ₦511M at the box office, becoming 2024’s highest-grossing Nollywood title and the fastest to hit ₦500M in just 12 days! Don’t stop! Let’s smash the record books. Watch Everybody Loves Jenifa in cinemas near you,” the post said.

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“Everybody Loves Jenifa” achieved unprecedented success by generating ₦206 million during its opening weekend. It established a new record for the highest-grossing opening weekend in Nollywood history.

The film demonstrated its immediate appeal by earning ₦87.8 million on its first day. This set another record for the highest single-day earnings in Nigerian cinema.

Funke Akindele masterfully reprised her beloved Jenifa character, delivering a performance that perfectly captured the character’s signature humour and charm.

The narrative follows Jenifa through an engaging storyline filled with personal growth, fame-related challenges, and comedic situations that resonated deeply with audiences across Nigerian theatres.

Akindele’s marketing strategy proved exceptionally effective. Moreso, she implemented comprehensive social media campaigns and made strategic appearances at various cinemas to connect with viewers.

Her promotional efforts transformed the film’s release into a cultural phenomenon that extended beyond traditional movie-watching.

The film features an impressive ensemble cast including Falz, Omotunde ‘Lolo’ Adebowale-David, Olayode Juliana, Chimezie Imo, Layi Wasabi, Bisola Aiyeola, Jackie Appiah, and Omowunmi Dada.

These actors collectively bring depth to this comedy-drama that successfully weaves together humorous moments, emotional depth, and surprising plot developments.

Check out more movie updates here.

MUSIC

Tems Debut Album Ranks #2 On Billboard’s R&B List Of 2024

Published

4 days ago

December 20, 2024

Reporter

Tems debut album hits #2 on Billboard's R&B list of 2024 | fab.ng

Tems’ Global Impact: A Billboard Recognition

Tems, a global music sensation, has solidified her position as one of Africa’s most successful artists, with her album captivating millions of fans worldwide and garnering numerous prestigious awards.

In a recent testament to her talent, her debut album secured the second spot on Billboard’s list of the best R&B albums of 2025.

This remarkable achievement places Tems alongside renowned artists such as Chris Brown, PartyNextDoor, Muni Long, and Bryson Tiller.

Furthermore, Billboard has praised Tems’ music for transcending the boundaries of Afrobeats, resonating with audiences across the globe.

“The Nigerian star finds her footing in the global spotlight and stands firmly in her purpose on her dazzling debut album Born in the Wild.

“She opens up about surviving her mental wilderness and learning to thrive in it on the opening acoustic ballad that shares the album’s title.

“And on the mid-tempo standout “Burning,” Tems confronts the trappings of her newfound stardom but finds comfort in the collective struggle. As someone who’s studied Céline Dion, Destiny’s Child, and Mariah Carey and dreamt of making soul-stirring songs that send people into their feelings, Tems succeeded with aplomb.

“Born in the Wild became her highest-charting project on Top R&B Albums (reaching No. 5) and marked her career-first entry on the Billboard 200, peaking at No. 56.

“And while Born in the Wild and “Love Me JeJe” earned Tems 2025 Grammy nominations for Best Global Music Album and Best African Music Performance, respectively, her best R&B song nod for “Burning” further reinforced the rich diversity of her music– and the notion that African artists like Tems cannot be bound to the catchall “Afrobeats” term, as their music has traveled well past the borders of the continent. – H.M.”

Tems’ debut album, “Born In The Wild,” received critical acclaim in the United States.

Indeed, the album earned a Grammy nomination for Best Global Album.

Additionally, her single “Burning” broke records by securing a nomination for Best R&B Song. Meanwhile, “Love Me Jeje” received a nomination for Best African Music Performance.

Check out more music updates here.

MUSIC

Adekunle Gold Reveals The Role Pheelz Played In Getting Him Signed To YBNL

Published

4 days ago

December 20, 2024

Reporter

Adekunle Gold credits Pheelz for his YBNL signing | fab.ng

Adekunle Gold marks a significant milestone this December 2024 as he celebrates 10 years since releasing his breakthrough single ‘Sade.’

This debut track, which creatively reimagined One Direction’s ‘Story Of My Life,’ catapulted him into Nigeria’s mainstream music consciousness in December 2014.

The artist recently shared compelling details about his journey to stardom in an industry interview, particularly highlighting his unique path to signing with YBNL.

Before his musical breakthrough, Adekunle Gold cultivated a professional relationship with Olamide through his work as YBNL’s graphic designer, creating cover art for the label’s artists, including Lil Kesh and Viktor.

The pivotal moment in his career arrived when producer Pheelz discovered ‘Sade’ and advocated for Gold’s signing to Olamide, leading to a transformative partnership with YBNL.

Under the label’s guidance, Gold released his debut album, ‘Gold,’ which produced standout hits like ‘Orente’ and ‘Pick Up,’ earning both critical acclaim and commercial success.

AG Baby, as fans affectionately call him, has demonstrated remarkable artistic versatility throughout his decade-long career.

He began his journey by crafting a distinctive urban interpretation of folk and traditional Yoruba music, later evolving into a dynamic pop star with the release of ‘Afro-pop Vol 1.’ His musical portfolio now spans five albums, each showcasing his growth and artistic range.

The singer-songwriter has established himself as one of Nigeria’s most accomplished artists, earning recognition for his exceptional songwriting abilities and commanding stage presence.

His performances continue to captivate audiences across Africa, solidifying his position as a leading figure in the continent’s music scene.

Gold’s journey from a graphic designer to a celebrated musician exemplifies his artistic versatility and dedication to his craft, marking him as one of Africa’s most sought-after performers.

Check out more updates here.