Transport minister, Dzifa Attivor has said cabinet must consider waiving the current 17.5% Value Added Tax (VAT) being charged domestic airlines or the domestic aviation sector might collapse.
According to her, the domestic aviation sector is under some pressure due to the lack of incentives and several tax charges.
“We have a lot of issue the 17.5%, the taxes on their imported spare parts… the cost of aviation fuel; it’s very funny that those international airlines when they bring their parts they don’t pay anything but our people are expected to pay. There is an imbalance there”, she explained.
The Ghana Revenue Authority sanctioned the implementation of a 17.5% Value Added Tax effective July 1 after months of delays.
After months of failed negotiations between the domestic airlines, the Transport and Finance Ministries and the Ghana Revenue Authority (GRA), the VAT charges have been implemented.
Chief Executive Officer of Starbow Airlines James Eric Antwi said all domestic airfares have automatically shot up by 17.5%.
Already air traffic flow from Kumasi and Tamale is reported to have reduced since July 1 after the hike in Domestic airfares.
The Minister of transport Dzifa Attivor says despite the refusal of the Finance Ministry to address their concerns, a petition would be presented to cabinet for consideration.
She said, “i have spoken to finance people and they say nothing can be done about it this year but we are going to seek for some intervention at cabinet so that we send it to parliament so that in the next budget which will be November it can be considered. If we continue at this level the industry will collapse”.
Credit: citifmonline