In a move aimed at boosting government revenue, President Bola Ahmed Tinubu has instructed all self-funded agencies, including the Nigeria Civil Aviation Authority, NCAA, to remit 50% of their earnings to the Federal Government.
However, this directive challenges the autonomy of the NCAA, contradicting the Civil Aviation Act that originally established it as financially independent.
According to the Act, fees paid by airline operators to the NCAA are designated for covering the expenses related to aircraft and personnel inspection and certification.
The newly imposed directive poses a threat to the financial stability of the NCAA, hindering its ability to fulfil crucial functions.
There is a risk that the NCAA might, under these circumstances, issue necessary paperwork to airline operators without actually conducting the required inspections and certifications.
Furthermore, the financial strain could compel the NCAA to transfer the burden to air operators, resulting in increased costs for passengers through higher flight ticket prices.
In 2022, the Nigerian Government modified the 2006 Civil Aviation Act, originally designed to establish the NCAA functions, ensuring its operation on a cost recovery basis.
This implies that the NCAA’s multifaceted safety oversight responsibilities rely solely on its internally generated revenue, eliminating dependence on funds from the Federal Government.
To safeguard the financial capacity of the NCAA for fulfilling crucial safety obligations, the amended Civil Aviation Act, specifically in paragraphs 22(1)&(2), granted the NCAA exemption from paying tenement rates, income tax, or any other applicable taxes, reinforcing its self-sufficiency.
The law also states unequivocally that the “provision of any law relating to the taxation of the income of any company or contribution to any trust fund shall not apply to the Authority (NCAA)”.
