Aviation agencies have kicked against the compulsory remittance of 25 per cent of the internally generated revenue (IGR) charged the Federal Airports Authority of Nigeria (FAAN) by the federal government, saying the agency is in dire need of the funds for infrastructure upgrade and training.
A letter emanating from the Office of the Accountant-General of the Federation, Federal Ministry of Finance, dated April 27, 2020 with reference: OAGF.TSA/93A/111 and titled: ‘Pilot Commencement of Automatic Deduction of 25% Operating Surplus’ sent to FAAN and nine other government parastatals had directed that these agencies must pay 25 per cent inflows to the federation account.
“This is to inform you that Mr. President has approved that 25 per cent of all inflows accruing to the under listed agencies and parastatals, other than those already earmarked either as consolidated revenue fund or federation account revenue item, passing through the CBN payment gateway (currently, REMITA) be deducted at source and per transaction as operating surplus,” it read.
The letter which was signed the Accountant-General of the Federation, Ahmed Idris, also directed that the amount deducted should be remitted real time to the FGN sub-recurrent account with the Central Bank of Nigeria.
However, reacting to the development, the Chairman of the National Union of Air Transport Employees (NUATE), FAAN, Mr. Shola Idowu told our reporter in a telephone interview that the agency couldn’t afford such remittances now because it has literally been battered financially due to the COVID-19 lockdown, which forced closure of the airspace for over three months.
He said during this period FAAN did not earn any revenue and it has become financially paralysed that it cannot even pay the salary of the workers.
“What we are saying is, since the federal government has put FAAN into TSA (Treasury Single Account), this is the time government should come to the aid of FAAN because we are looking at what can be done to salvage the aviation industry and FAAN as an agency is adversely hit by the COVID-19 pandemic.
“This was why the labour unions wrote an open letter to the President. The cash cow (FAAN) is down and needs aid to survive. This is the time of drought.
“There is need to support FAAN now, support its workers welfare and every hand should be on the deck now. FAAN has been trying for the federal government. We know how much we could have generated if not for the coronavirus lockdown. Nobody should be sacked and government should address the immediate needs of the airports and workers,” Idowu said.
Speaking in the same vein, a unionist in the Nigerian Civil Aviation Authority (NCAA), told our reporter that it was surprising that the federal government was demanding remittances from FAAN, which along with other aviation agencies has been ravaged by COVID-19 lockdown.
“There is no justification in the first place to demand remittances from any of the agencies in the aviation industry. There is so much to be done in the industry so FAAN needs every money it could generate and now every agency is finding it difficult to even pay salaries. This is an industry that is begging for bailout. Government is not looking at the need to develop the aviation industry,” the unionist said.
Similarly, a FAAN official who pleaded to remain anonymous, told our reporter that there was no big deal about complying with the directive, but that currently FAAN is struggling to pay salaries and may become insolvent if no help comes from the government.
The official noted that it is not possible for FAAN to remit the sum this year because for almost four months the agency has not earned any money.
“Payment of the remittances is not possible this year because for almost four months no landing, no takeoff, even cargo is not coming much; so it is totally impossible to pay the 25 per cent remittance this year. In fact, the federal government should give FAAN stimulus based on the fact that the agency does not have money and needs to pay salaries, maintain facilities and secure the airports,” he said.