Airlines risk N.5m daily fine as automation deadline ends today

*Carriers owe NCAA N2.5b

The Nigerian Civil Aviation Authority (NCAA) said its final ultimatum to airlines to automate their remittance of the statutory five per cent Ticket Sales/Cargo Sales Charge (TSC/CSC) ends tomorrow.

Airlines risk N500, 000 fine if they fail to comply with the aviation regulatory directive, according to spokesman for NCAA, Sam Adurogboye.

Adurogboye told Woleshadare.net that the idea was to bring transparency to the system by ensuring that the carriers remit money they collect on behalf of the agency to it.

Nigerian airlines owe the NCAA over N2.5 billion in non-remittance of money they collected from passengers but kept them to themselves.

Nigerian airlines have accused the agencies of multiple charges they said is crippling their existence.

A statement by Adurogboye explained that the authority had shifted the January 31st 2017 ultimatum to March ending at the instance of Airlines Operators of Nigeria (AON) at their earlier meeting with the Director General, Capt.Muhtar Usman and his team at the Aviation House.

Adurogboye stated that the introduction of the Aviation Revenue Automation Project (ARAP) for revenue collection is to aid data integrity, transparency, transaction accountability, controls and revenue assurance to the Authority.

With the expiration of this final warning, he said it is expected that all airlines that are yet to adhere to the automation and remit collected revenue  to NCAA  should comply forthwith.

His words, “Failure to comply will be viewed seriously as the authority will be forced to invoke the necessary provisions of the law against defaulting airline.”

He further stated that the five per cent Ticket Sales Charge/Cargo Sales Charge, an Internally Generated Revenue[IGR] to NCAA and other agencies as enshrined in the Civil Aviation Act 2006 is not a tax or levy on the airlines, but a charge paid by passengers for  services rendered towards the development of Aviation Industry in Nigeria.

The decision to collect the charges by the airlines, he, reiterated was mooted by the operators and unanimously agreed upon at the 2001 Civil Policy Review with the sole aim to enhance passengers’ facilitation.

The NCAA has severally defended the mandatory five per cent TSC it collects through the operators, saying it has no connection with the financial distress faced by some domestic airlines.

The agency said contrary to claims by operators, the passengers rather than airlines are charged and must be sustained as mandated by the law.

The Director-General of NCAA had recently, Capt Muhtar Usman recently noted that section 12 (1) of the Civil Aviation Act 2006 says that there shall continue to be a five per cent air ticket contract, charter and cargo sales charge to be collected by the airlines and paid over to the Authority.

“Where lies our business integrity if we cannot give back what is entrusted into our hands to the owner. Even on request, we shy away from our responsibility of paying back the entrusted money to the appropriate owner,” he said.

It would be recalled that calls have been made lately on the need to reduce multiple charges on the operators, especially in the face of huge indebtedness to NCAA and other regulatory agencies.

The DG, however, said it was unfortunate that some of the operators could not distinguish between operational cost and profit margin.

“A good businessman endeavours to separate the profit margin with the operational cost. And if we were doing this, we would have been able to separate the five per cent service charge from the real ticket sales and draw our operational/profit margin from the actual.

“NCAA has reports that some airlines have tagged the five per cent Ticket Sales Charge (TSC) and five per cent Cargo Sales Charge (CSC) as a tax or levy and as such has become a drain on their earnings.

“This is a misrepresentation of the fact. Passengers, as contained in the ticket, pay the TSC. The airlines role is to collect and remit same to the regulatory authority,” he said.

Usman said instead of grumble over charges, operators in the aviation industry should rather take advantage of the e-payment system to lessen the burden remitting to the appropriate authority.

“Let me state that the TSC and CSC are collected at source from passengers by airlines on behalf of the Federal Government, to enable all aviation agencies to tackle safety critical issues as they arise to engender safe, secure and efficient air transportation and allied services for the overall benefits of all stakeholders.