Relief has come the way of commercial airline passengers as the Federal Government exempts commercial flight tickets from Value Added Tax (VAT) in the new Finance Bill signed into law by President Muhammadu Buhari.
In the Finance Act 2020 which took effect from January 1, 2021, the 7.5% VAT which used to be borne by passengers would be erased and this is expected to reduce the price of flight tickets which has gone over the roof in the past weeks and also improve profitability for commercial airlines.
Taxmobile.Online deduced from a tax expert in PriceWaterCooper Nigeria, Taiwo Oyedele, who also doubles as one of the members of the committee that drafted the Finance Bill, said that domestic airlines made demands for several concessions. He also said that the importation of aircraft and spare parts have been exempted from VAT.
On his Twitter handle, he said:
“Effective January 1, commercial flight tickets have been exempted from VAT. Next time you fly, cross-check that you are not wrongly charged VAT and hopefully, airfares should come down.”
Before you go
In a related development, the Managing Director of Aero Contractors, Captain Ado Sanusi, has parted ways with the airline after four years effective December 31, 2020.