FIRS gives domestic airlines two months concession to remit VAT

In a bid to encourage domestic airlines in a move to ensure they remain in operations, the Federal Inland Revenue Service (FIRS) has given them two months concession after the billing period to make their Value Added Tax (VAT) remittances.
The agency says with this concession, collections done now are swept during the upper month instead of the following month immediately after so as to give room for reconciliation and for airlines to recoup their credit sales.
“Even with the AutoCollect, we can programme it at 50 percent so that way we don’t expect everything to be swept off at once,” Babatunde Fowler, chairman of FIRS said at a meeting with Airline Operators of Nigeria (AON).
Fowler said: “We agree that the airline industry is challenged. Government is not out to make profit but to make life more comfortable for the people. Exemptions on tax issues are beyond FIRS, as they do not make the law. So, all we can do is offer to make it easier to give domestic airlines a soft landing by meeting them halfway in order to obey the tax laws.”
Nogie Meggison, chairman of AON, noted: “Airlines have no issue with paying or collecting the statutory VAT for FIRS, but there was need to take a look into the issue of fairness against our competitors, clarity on the automation as well as a 30 days period to allow for invoicing, reconciliation and billing before payment.”
Meggison therefore called for more dialogue between the FIRS and AON in order to better understand the automation process and allow smooth operations for both parties.
Responding, Fowler admonished AON to engage the Presidency through the Department on The Ease of Doing Business, the Senate and the minister of finance to dialogue on how the laws could be amended so that airlines could be at par with their competitors and as the norm worldwide in order to address the challenges by coming up with a lasting solution.
Samson Fatokun, the IATA area manager, South West Africa, observed that about 60 percent of tickets sold were sold by travel agents and that airlines do not get the money until two weeks later or 45 days later due to the issue of credit offered to the agents.
He said that hence, it would not be fair if the proposed automation of airline VAT remittance was being charged real time immediately after sales for money that airlines were yet to receive.
He therefore called on FIRS to look at the bigger picture on the long term and consider how to help sustain the aviation sector.

 

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