Why we removed VAT from air fares, by Buhari

President Muhammadu Buhari says the recent decision by the Federal Government to remove Value Added Tax (VAT) from domestic air transportation is to make air travel more affordable to citizens.
The president said this when he inaugurated the new International Terminal of Port Harcourt Airport, Omagwa, Rivers, on Thursday.
He said the removal of the VAT was also meant to create job opportunities in the nation’s aviation sector.
The president also explained that the government’s decision to charge zero VAT from domestic air transportation was in line with global best practices.
“This will make air travel more affordable and subsequently lead to the creation of jobs by the air transport service value chain as well as increase revenues for government.
“Today’s commissioning is an example of government’s deliberate policy to sustain the development of infrastructure for economic growth in all geo-political zones of the country,’’ he said.
The president said that the inauguration of the terminal was a respond to global trend in which aviation had became a catalyst for economic growth as a result of massive and speedy movement of persons, goods and services in a safe and secure manner.
“Following the large increase in national population with consequent surge in air passenger traffic, the capacity of the airport terminals became woefully inadequate to cater for the increase in passenger traffic.
“Although, palliative measures were periodically carried out, the facilities were fast giving-in to the effects of wear and tear.
“It, therefore, became necessary to take decisive action to ensure our terminals meet minimum international standards for the travelling public.
“As part of the infrastructure renewal programme, the construction of four new international terminals at Abuja, Lagos, Port Harcourt and Kano airports was embarked upon by the Federal Government with a view to modernising the aging airport infrastructure,”
The president said that his was to meet global aviation standards and improved service delivery in tandem with best international practices.
He said that Nigeria having an advantageous central location within the sub-region and its desire to develop into a regional air transportation hub, must upgrade its facilities to take advantage of its assets.
Buhari  also said that the inauguration of the terminal was part of his administration’s promise to upgrade and develop Nigeria’s transport, power and health infrastructure, and complete a number of stalled infrastructure projects.
He said the promise included the construction of new terminals at the country’s five major airports,  numerous major road projects, key power transmission projects and the completion of the Kaduna – Abuja as well as Itakpe to Warri Railway lines.
Buhari commended the people of the South South region and airport users for their patience during the period of the construction.
He also lauded the efforts of the Federal Ministry of Transportation, particularly the Aviation, the Chinese government and the China Exim Bank for their financial support and the various roles they played leading to the successful completion of the project.