Home Business Tinubu About to Cause Air Disaster, Imposes 50% Tax on NCAA

Tinubu About to Cause Air Disaster, Imposes 50% Tax on NCAA

Tinubu Demands 50% of NCAA Revenue Goes to FG Amidst Rising Inflation

In a bid to raise revenue, President 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. Under the provisions of the Act, all fees paid by airline operators to the NCAA are meant to cover the cost of inspection and certification of aircraft and personnel. The new directive effectively defunds the NCAA and leaves it unable to carry out these important functions.

This could lead to a scenario where the NCAA, having charged airline operators the statutory inspection and certification fees, would be forced to issue the relevant paperwork without actually carrying out these duties. It could also lead to the NCAA passing across the cost to air operators, who would in turn pass the cost along to passengers in the form of more expensive flight tickets

It will be recalled that 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. This means that 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.

The law also 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)”.

The only obligation the NCAA has concerning remittance of 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.

In hunting for more money to run an expensive, top-heavy government with a record number of political appointees, the Tinubu government decided to contravene this Act of the Legislature by publishing a circular in December 2023, which directed all self-funded government agencies and parastatals to automatically begin remitting 50% of their internally generated revenue to the Federal Government.

The directive is effectively an illegal one because no law permits the government to divert the NCAA’s revenue to the Federal Government account. It will also be recalled that the NCAA revenue in question -which keeps Nigeria’s airspace safe – will now be used to fund executive waste and frivolity, such as handing over a N129bn blank cheque to Tinubu’s son-in-law  as earlier reported.

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

Essentially, the new directive would mean 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 that service.

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

A source revealed to West Africa Weekly that the Tinubu Government, since January 2024, unilaterally froze the accounts of all aviation agencies, including the NCAA, only releasing certain amounts in bits to the agencies so they could staff salaries alone. The source said:

“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.”

NCAA Concern(s)

In essence, the NCAA is left with solving the safety implications following the 50% cut reduction:

  • How will the NCAA continue to perform its safety oversight obligations to the public without funds?
  • How will the NCAA continue to pay the salaries, allowances, training, and health insurance of its staff without funds?

  • With what well-maintained and fueled vehicles will the NCAA perform ramp inspections and regular audits on operators to ensure that they continue to use safe and airworthy aircraft, required aerodrome and air navigation equipment and tools, and qualified and experienced aviation personnel to provide safe and secure air navigation?

The normal surveillance activities of NCAA on the airlines, aerodrome operators, maintenance organizations, training organizations, and other allied services of operators are taken from the 5% ticket sales charge (i.e. 5% of the money each passenger pays goes to a certain account and is shared among NCAA, NAMA, FAAN, NSIB, NIMET, and NCAT), of which pays the salaries, training expenses of Staff, purchasing, and maintenance of its infrastructure are made from.

For the NCAA to provide this service, the operator is normally given an invoice containing the cost of flight ticket, feeding, hotel accommodation, visa fee, and the statutory fee for the exercise. Thus, the NCAA recovers from the operator the cost of providing this safety oversight without calling on the Federal Government.

Similarly, there are hundreds of such services that the NCAA renders to airlines, aircraft maintenance organizations, aviation training organizations, aerodrome operators, other service providers, and aviation professionals.

All these are now jeopardised by the new directive.

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