British Airways (BA) has admitted evading tax in Nigeria, marking a turning point in the face-off between the government and the foreign airline which began weeks ago over discriminatory fare charged on the lucrative London-Lagos route.
Appearing before the Senate Committee on Aviation that organized an investigative public hearing on the violation of aviation laws by foreign airlines, BA Country Manager Kola Olayinka admitted to the carrier's tax evasion saying: “It is not only BA; no airline, as we speak, is remitting the five per cent charged on air fares to the NCAA (Nigeria Civil Aviation Authority)".
BA admitted it had failed to remit the five per cent Passenger Fuel Surcharge (PFS) on tickets to NCAA as required by global aviation practices.
Though the British carrier tried to assure the Senate Committee of its preparedness to begin to pay the tax, provided the legal requirements were clearly spelt out, the Senate Committee on Aviation has threatened to recommend its prosecution for tax evasion.
The General Manager of Air France-KLM Nigeria, Mr Christian Herpi, had told the same committee that payment of PFS had been a practice by airlines worldwide and was not peculiar to airlines flying from Nigeria.
Faulting BA’s record of dodging tax in Nigeria, Senator Hope Uzodinma, the committee chairman said tax evasion is a criminal act and must be prosecuted accordingly.
Mr Uzodinma said: “Refusal to remit taxes is not a civil matter, it is a criminal offence which should be investigated by the appropriate department and we may have to do so.”
He further faulted Mr Olayinka's argument that not only BA was evading payments.
"That others are not paying doesn't make it right. The problem is that the NCAA continues to treat this matter as civil. Refusal to pay revenue to government is a criminal matter and we must treat it as such. We will invite the relevant department to investigate the matter for possible prosecution,” he said.