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Senate orders BA, Virgin, others to remit 5% PFS charges to FG

By Henry Umoru & Inalegwu Shaibu
ABUJA — THE Senate, yesterday, urged the Economic and Financial Crimes Commission, EFCC, to as a matter of urgency, begin the investigation of British Airways and Virgin Atlantic Airways over alleged financial fraud and tax evasion.

Also yesterday, the Senate directed all foreign airlines operating in the country to immediately refund five per cent Passenger Fuel Surcharge, PFS, to the Federal Government.

The Senate also noted that the PFS, being paid by Nigerian passengers who patronise the two British airlines, was not only fraudulent, discriminatory and against aviation regulations, but also a criminal act.

Speaking on the second day of the three-day public hearing on the violation of aviation laws and practice by foreign airlines in Nigeria and lapses in operation of the regulatory agencies by the Senate Committee on Aviation, Chairman of the Committee, Senator Hope Uzodinma, stressed that failure on the part of British Airways and Virgin Atlantic to remit five per cent of the PFS charged London-bound Nigerian passengers as tax to the Federal Government was illegal and criminal.

According to him, the payment of the PFS by Nigerian air travellers was an economic crime perpetrated by the two foreign airlines.

He said it was wrong for the regulatory agency, Nigerian Civil Aviation Authority, NCAA, to treat the violations committed by the foreign airlines as civil offences when anti-graft agencies ought to have been notified of the violations to enable them carry out in-depth investigations.

He said: “It is the opinion of this committee that the government is entitled to the five per cent of the PSF charged by the foreign airlines.”

Tax evasion

Meanwhile, the airlines admitted not paying the five percent statutorily required from all ticket sales, even as they claimed ignorance of any law requiring that the PFS be counted as revenues accruing to them from ticket sales.

Speaking further, Uzodinma, who noted that it had been established that the PFS was a revenue accruing to the airlines, since it usually appeared in their account books as a major revenue source, which is taxable, however, tasked the NCAA to immediately commence the recovery of the taxes from the airlines.

He said refusal to pay the money amounted to tax evasion and should, therefore, be treated as financial crime.

We are ready to comply

In his reaction, General Manager of Air France-KLM Nigeria, Mr. Christian Herpi, said if an extant Nigerian law required the airline to pay five per cent from the PFS, it was ready to comply, adding that it had been a practice by airlines worldwide. He said the action was not carried out only by airlines flying from Nigeria.

Country Manager of British Airways, Mr. Kolawole Olayinka, said his airline was prepared to comply with the directive immediately, if it was clearly spelt out in the statute books.

Olayinka, who noted that the law of demand and supply was responsible for the increase in the airfares, as it affected First and Business Classes, recommended that more frequencies be allocated to airlines flying the routes concerned.

He noted: “We need more airlines and a national carrier. If not, we need to ensure that existing local airlines were supported to be able to fly the nation’s flag.”

Meanwhile, foreign airlines whose representatives appeared before the Senate committee have advised the country to establish a national airline as a step towards boosting the aviation industry.

They told the committee that the only way forward was for Nigeria to run a national carrier, saying even smaller African countries owned national carriers.


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