Senate seeks prosecution of BA, VAA for tax evasion

By Onyedi Ojiabor and Sanni Onogu, Abuja Thenationonlineng.net

SENATE directive urging an immediate legal action against British Airways (BA) and Virgin Atlantic Airways (VAA) over tax evasion yesterday widened the gulf between the Federal Government and the two airliners over discriminatory air fares visited on Nigerians.

A The Senate Committee on Aviation probing the disparity in airfares charged by foreign airlines accused the BA and VAA of perpetrating advance fee fraud for allegedly deliberately refusing to remit five per cent of the passenger Fuel Surcharge (PFS) to the Federal Government even when they are aware of such tax.

The Senator Hope Uzodinma-led probe committee, on its second day sitting, took the BA to task for failing to remit the statutory five per cent tax, allegedly surreptitiously introducing the PFS.
It (committee) also accused the foreign airliners of using unfair trade practices to create a monopoly because they are the only airlines that operate first class cabin direct flight from Nigeria to London.
The committee was not convinced by BA Country Representative Kolawole Olayinka’s defence that his airline has not violated any Nigerian law through the practice.

Olayinka’s argument angered the lawmakers who reminded him that there were provisions in the Penal Code dealing with obtaining money by false pretence.

According to the lawmakers, the mere fact that the laws, which the BA Representative described as being in “bits and pieces” exist, meant that the law has to be complied with.

The committee members insisted there was the need for redress where the law has been violated.
Uzodinma directed the Nigeria Civil Aviation Authority (NCAA) to immediately recover all monies accruable to the Federal Government from the asffected airliners.

The NCAA boss, Harold Demuren, told the committee it was baseless for BA to argue that price disparity and high fares exist because “Nigerian skies are closed.”

Demuren said it was the same argument that made Nigeria to admit VAA in 2006 to fly the London route but added that since the admission of VAA, prices have been on the increase.

He said he was worried BA is citing closed skies for its actions whereas it has continued to collude with VAA to monopolise first class cabin services on the Nigeria- London direct flight.  

Olayinka’s claim that fares can only fall if new airlines are admitted into the market, increase in the number of flights by existing ones and introduction of a national carrier by Nigeria, did not go down well with NCAA.

NCAA sought to know how the suggestion will break the monopoly of BA and VAA , who have “colluded” to prevent other airlines from flying first class cabin direct to London.