Tinubu Complicates Air Transportation , Imposes 50% Tax on NCAA

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In a bid to accumulate tax returns, Bola Ahmed Tinubu has issued a directive mandating all self-funded agencies, including the Nigeria Civil Aviation Authority (NCAA), to remit 50% of their revenue to the Federal Government.

This directive challenges the autonomy of the NCAA and violates the Civil Aviation Act that established it as a self-sufficient entity, which ensures fees paid by airline operators remain a revenue meant to cover the cost of inspection and certification of its aircraft and personnel.

In 2022, the Nigerian Government amended the Civil Aviation Act of 2006, a law signed to establish the NCAA functions provided that it is to be run on a cost recovery basis. (i.e. the multidimensional safety oversight function of the NCAA is solely based on its internally generated revenue without depending on the Federal Government for any funds).

In order to ensure that the NCAA would not lack funds to discharge these critical safety obligations, paragraphs 22(1)&(2) of the Civil Aviation Act exempted the NCAA from payment of any tenement rates, income tax, or any other tax in force.

Also, the law states unequivocally that the “provision of any law relating to the taxation of the income of any company or contribution to any trust fund shall not apply to the Authority (NCAA)”.

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The only obligation the NCAA has concerning remitting its funds to the Federal Government is stated in paragraph 21(4) of the Act, which states that the NCAA is to remit two-thirds of its operating surplus for the year to the general reserve fund established under that section.

Despite the stands of the civil law in Nigeria, the executive arm of the government, in looking for more money to run its expensive government, decided to contravene this Act of the Legislature by publishing a circular in December 2023, which, inter alia, requires all agencies and parastatals of the government that are self-funded to automatically start remitting 50% of its internally generated revenue to the Federal Government.

Such means of taxation are not only deemed illegal but lack legal backing as no law permits the government to divert the NCAA’s revenue to the Federal Government account, including funding government frivolity like earlier reported, such as issuing N129bn to Tinubu’s son-in-law, amongst other things.

However, it is worthy of note that under the Chicago Convention and as a signatory member of the International Civil Aviation Organization (ICAO), Nigeria is mandatory to comply with ICAO Standards and Recommended Practices (SARPs) to ensure air navigation in the country, which with the 50% reduction in revenue by the government poses serious questions about its commitment to air safety in Nigeria.

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Meanwhile, the NCAA is responsible for ensuring air safety and compliance with the International Civil Aviation Organization (ICAO) rules, including the Standards and Recommended Practices (SARPs), which rely heavily on fees generated from airline operators for inspections and certification, amongst many other airline procedures.

Essentially, Tinubu’s neglect of the NCAA’s critical functions shows that any operator who pays money to the NCAA to have its aircraft inspected would not be offered such service because the government has taken away 50% of the amount meant to provide such service.

By extension, this means that the safety of air travel in Nigeria and the lives of potential passengers who fly are being endangered.

Speaking of aircraft dangers, a source revealed to West Africa Weekly that the Federal Government, since January 2024, froze the accounts of all aviation agencies, including the NCAA, and decided that it would be releasing certain amounts in bits to the agencies as they felt just to pay only staff salaries.

“At the moment, the NCAA does not have any money available to discharge its core functions because the Federal Government has taken the money to use as it pleases. Both local and foreign operators who paid the NCAA to deliver certain mandatory safety services are complaining without being aware of the internal issues the NCAA is facing,” the source reveals.

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