Aviation stakeholders seek review of 40% TSA deduction

Aviation stakeholders seek review of 40% TSA deduction

Aviation stakeholders have called for a review of the compulsory contribution of 40 per cent of aviation agencies’ revenue to the federation account.

This was contained in a communiqué issued at the end of the second edition of the Federal Airports Authority of Nigeria Conference held in Abuja.

The Managing Director of the FAAN, Capt Rabiu Yadudu in his presentation on “Sustainability of the aviation industry in Nigeria: The Airport Operators’ Perspective”, stated that the agency contributed about N44bn of its revenue to the federation account in 2022.

Yadudu said, “Talking about government policy, right now, we have 40 of our revenue being deducted at source. Finance is about 99 per cent of the challenges we are facing in the industry. Last year, about N44bn of our revenue went to the federation account. The price of diesel has increased to N1,150 per litre from N400 we were buying it about a year ago.

“Now, we have our own Act. With this, FAAN should not be sending any percentage of its revenue to the federation account.”

Recall that in October 2022, the Federal Government increased the compulsory contribution to the federation account by its revenue-generating agencies to 40 per cent from 25 per cent.

However, the participants at the conference identified debt, financing, and the environment, among others, as fundamental issues affecting sustainable development in the aviation industry.

According to the conference’s communiqué, after extensive discussions, the conference resolved that government policies should be designed to be a major economic enabler and catalyst to sustainability in the aviation industry.

“Government policies should be designed to be a major economic enabler and catalyst to sustainability in the aviation industry.

“One policy identified as a major clog to sustainable development is the 40 per cent TSA deduction policy by the Federal Government, which needs to be reviewed as it is against international standards and practices, and provisions of the FAAN Act,2022,” the communiqué disclosed.

The communiqué further stated that FAAN as an airport operator needed to diversify its sources of income from aeronautical to non-aeronautical streams of revenue and as an assets’ manager, while ensuring that its assets yield maximum return as the majority of its land mass across all the airports are currently suboptimally utilised.

“FAAN should show exceptional leadership in the airport management model and lead all other stakeholders in the operational process, negotiations, and coordination of related activities that will advance the sustainable aviation development process.

“Stakeholders’ engagement is crucial to airport planning. FAAN should, therefore, ensure that stakeholders’ requirements are factored into the airport master plan,” it averred.

It also urged aviation stakeholders to identify, understand and support each other for sustainability to be achieved in the industry.

“There should be a reduction in bureaucratic bottlenecks that constitute a clog in the sustainability of aviation development in Nigeria.

“Compliance and monitoring of operations are pivotal to enhancing stakeholders’ satisfaction and certification of more African airports is important for sustainability in the aviation industry and Nigeria should be the leader of the African certification process,” the communiqué noted.

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