Ghana's domestic airline has seen a 26 percent increase in patronage after abolishing VAT on domestic fares, that is according to Deputy Finance Minister of Ghana, Kwaku Kwarteng.
Domestic air travels plunges 26 percent after VAT abolishment
The West African country proposed a review of 12 key taxes in its 2017 budget.
They included the 17.5% VAT on domestic airfares, the 17.5% VAT on financial services as well as the 5% on real estate.
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The tax reviews were aimed at providing a friendly environment for businesses in the country.
The motion to remove the 17.5% VAT on domestic airfares was moved in Parliament in April 2017.
Kwaku Kwarteng explains that “In fact, we are going to come to this House as Ministry of Finance to present the 2018 budget statement and there would be some reports on the outcomes of the policies we have implemented so far; at least with what we have seen so far is that the outcomes are favourable.”
The Deputy Aviation Minister, Kwabena Okyere Darko in August 2017 disclosed that the removal of the 17.5% VAT on domestic air travel had increased Ghana’s domestic air passenger volume by 24 percent as at May 2017.
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The passenger volume at the time witnessed an increase from 163,322 to 201, 851 between May 2016 and the same period in 2017.
