NCAA Grounds Air Nigeria Operations Again Over Insolvency

Sued by FIRS over Tax Evation

by Lateef Lawal

(WireNews+Co) - Lagos, Nigeria - 22 June 2012

The Nigerian Civil Aviation Authority (NCAA) has once again grounded the operations of Air Nigeria over alleged insolvency issues.

Competent sources at the Ministry of Aviation said the NCAA was directed by the Minister to ground the operations of the airline when it was discovered that the airline was owing virtually every of its service providers- that is- fuel suppliers, aviation agencies and aircraft maintenance organisation overseas and on top of it all, staff salaries. All these indices, it was learnt could impact negatively on safety. This, it was gathered was why the Ministry of Aviation had to direct the grounding of the airlines operation, aside from the fact that the airline was alleged to have been illegally withholding tax payment due to the Federal Government.

However in a statement from the carrier following the latest development said, “The Nigerian Civil Aviation Authority (NCAA) has suspended our flight operations effective immediately over alleged indications that the airline is in financial distress.

“We wish to apologize for all the inconvenience that this order by the NCAA will bring on our passengers and wish to assure that Air Nigeria will continue to liaise with the relevant agencies to ensure that the suspension order is lifted as soon as possible.”

The Federal Inland Revenue Service (FIRS) had on Wednesday filed charges of evading five years tax payment of N4.86 billion naira and forgery of Tax Clearance Certificate (TCC) against Air Nigeria.

Mr Jimoh Ibrahim, the company’s Chairman, Mr Kinfe Kahssaye, Managing Director and Air Nigeria Development Company Limited (formerly Virgin Nigeria Airways Ltd), were joined in the 10-count charge.

The suit comes barely 48 hours after the service arrested Kahssaye in Lagos on Monday. He was flown to Abuja same day and detained by the service and released on Tuesday afternoon. An official of FIRS, said the service met with Ibrahim on Tuesday, but did not reach any agreement on the payment of the tax.

In the charge, FIRS accused officials of the indigenous airline of illegally obtaining Tax Clearance Certificates.

They were also said to have unlawfully presented the fake certificate to the Minister of Interior for the renewal of expatriate quota positions for 20 pilots and 10 other persons.

According to the FIRS, the accused persons failed to deduct and pay taxes accruing to government from Withholding Tax and Value Added Tax (VAT) from 2007 to 2010, totaling N4.86 billion.

The charge said Air Nigeria and the accused persons failed to deduct at source, N394.1m.

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