New Government Local airlines to enjoy VAT cut and reduced fuel prices

The Minister-Designate for Aviation, Cecilia Abena Dapaahshe mentioned that she will hold discussions with all stakeholders in the domestic aviation sector to ensure these measures are implemented.

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The Minister-Designate for Aviation; Cecilia Abena Dapaah play

The Minister-Designate for Aviation; Cecilia Abena Dapaah

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The Minister-Designate for Aviation, Cecilia Abena Dapaah has said that she is determined to reduce taxes on domestic air fares and also reduce fuel prices for local airlines.

At her vetting by the Appointments Committee of Parliament on Wednesday, February 8, 2017, she mentioned that she will begin this by holding discussions with all stakeholders in the domestic aviation sector.

“We are going to look at the handling charges and the prices of aviation fuel. We have realized that the airlines have thirty percent of cost comprising of aviation fuel while fifteen percent is made of handling charges.”

READ ALSO: High cost of utility still a challenge for businesses - AGI

“I cannot assume that I know all the reasons for the dwindling fortunes of the domestic airlines as such I will be meeting the domestic airline operators and report back to the committee if the need arises,” she added.

The increasing cost of flight tickets has led to a decline in passenger volumes between 2015 and 2016.

The figure has declined from 717,000 to 427,000 within the one year period.

READ ALSO: We'll create 20 big companies in 4 years - Minister-Designate for Business Development

The high cost of aviation fuel also adds up to the high operational cost in the sector. Dapaah explained that this development has affected the lease agreements for domestic airline companies as the cost is expensive.

In October 2016, the erstwhile NDC government reduced the cost of fuel by twenty percent. This was part of efforts to make Ghana an aviation hub within the sub-region.

The NPP during its campaign in 2016 promised to scrap the 17.5 percent VAT on domestic air tickets in order to make it cheaper and more attractive for potential clients.

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