BusinessAirline Operators Risk N5m Fine, Imprisonment Over TSC Default

Airline Operators Risk N5m Fine, Imprisonment Over TSC Default


The new Civil Aviation Act has prescribed N5 million fine or two years jail sentence or both for any airline or its promoters who failed to remit the mandatory ticket sales charge/cargo sales charge (TSC/CSC) to the coffers of the Nige­ria Civil Aviation Authority (NCAA).

This is as the new Act empowers NCAA to now delegate the power for the collection of the TSC/CSC 5 per­cent, especially from a recalcitrant debtor airline and from those who are not on the tripartite agreement with the regulatory body.

These are contained in the New Civil Aviation Act 2022 made available to THEWILL Newspaper.

President Muhammadu Buhari had assented to the New Civil Avi­ation Act 2022 in August, which re­pealed the Civil Aviation Act 2006.

The New CAA 2022 section 23(1) states that there would be a 5% of airfare, contract, charter and cargo sales charge payable to the NCAA and this applies on all international and domestic air transportation originating in Nigeria, irrespective of place of sales, issuance of air ticket or execution of the contact of carriage. ­

The new Act in section 23(2), also stipulates that the 5 percent of airfare, contract, charter and cargo sales charge would be chargeable on the total amount, excluding stat­utory fees and taxes paid by a passenger for an airfare, in a contract relating to carriage of persons or goods for hire and reward in the case of air transportation not involving the issuance of air ticket and many others.

The section 23(3) of the new Act also states that NCAA may delegate the power to collect the charges from airlines.

Capt. Musa Nuhu, the Di­rector-General, Civil Aviation (DGCA), had recently lament­ed that indigenous airlines owed it over N19 billion and $7.8 million accruing from the 5 percent TSC/CSC.

The 5 percent TSC/CSC is statutory and deducted from the total air ticket paid by air passenger to airlines and the same applies to car­go charge.

The sum is shared among four aviation agencies: NCAA, Nigerian Airspace Manage­ment Agency (NAMA), Nige­rian Meteorological Agency (NiMET) and the Nigerian Safety Investigation Bureau (NSIB).

There has been a huge tus­sle between NCAA and air­lines, especially the domestic carriers over their failure to remit the sum to NCAA.

NCAA before the repeal of the Civil Aviation Act 2006, got 58 percent from the total 5 percent of charges and it is still the major revenue earn­ing for the agency, while the other four agencies shared the remaining 42 percent in different proportions.

However, it is not clear if the 58 percent collection is still retained in the new Act 2022, but Capt. Musa Nuhu, the Director-General, Civil Aviation (DGCA), warned that the renewal of Air Operator’s Certificate (AOC) is still tied to the payment of the debt by airlines.

A source close to the agen­cy recently confided in Daily Independent that a particular airline owed NCAA about N10 billion of unremitted TSC/ CSC, while Azman Air was in September grounded for its failure to remit to NCAA over N1.2 billion accruing from the same charges.

Nuhu had to compel the management of the airline to sign a memorandum of under­standing (MoU) of N50 million monthly on the repayment of the N1.2 billion legacy debt before it could be allowed to return to operations.

Meanwhile, NCAA had earlier in September warned domestic airlines to come up with a plan for debt repayment within a month or face suspension.

The agency ordered the airlines to begin repayment of debts over N45.29 billion ($108.8 million) or face suspension.

Nuhu had equally called on airlines to formulate a plan and come to an agreement with the agency within the next month as the country’s aviation industry faces increasing financial challenges.


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