The Aviation Minister-designate says she would work to de-stress domestic airline operators in the country by scrapping the 17.5 percent Value Added Tax (VAT) imposed on domestic travels.

Cecilia Abena Dapaah is unhappy about the high cost of operations incurred by operators as a result of the tax introduced by the erstwhile National Democratic Congress (NDC) government in 2014.

Speaking before the members of Parliament's Appointments Committee Wednesday, she said the governing New Patriotic Party (NPP) is committed to improving the airline environment because it has noted the tax has been an "albatross around their [domestic airline operators] neck"

Ghana’s domestic aviation sector has been reeling under high operational costs, a situation which has been worsened by high cost of aviation fuel and taxes.

Due to the introduction of the tax, a one way air fare from Accra to Kumasi which was GH¢270 rose to GH¢315. This has led to a slump in profit of operators because of a sharp drop in passenger numbers which experts pegged at 40 percent.

Currently a return flight to Kumasi costs about GH¢600 twice the previous price.

Government reduced the aviation fuel by 20 percent in 2016, but industry players insisted their operational cost would be reduced if the VAT is completely eliminated.

The tax was approved by Parliament in 2014 as part of the Value Added Tax (Amendment) Bill which extended tax on domestic air travel.

There was an increase in the standard VAT rate from 12.5 percent to 15 percent. However, the 2.5 percent National Health Insurance Scheme Levy (NIHL) charged on goods and services was maintained.

Ghana's major airport, Kotoka International Airport

Desirous of boosting domestic travels in the country, Madam Dapaah said she would work with operators to eliminate things that hamper their operations.

She identified monitoring as one key area the aviation authorities are lacking in the conduct of their work, promising to take it up.

According to her, if operators had been monitored by the previous government, passengers would have felt the impact of the reduction in aviation fuel.

The former Deputy Housing Minister also said the absence of spare parts to repair faulty planes in the country is another issue affecting operators.

"The situation now is a bit discriminatory [because] the domestic ones have to pay taxes on their spare parts," she said, adding she would tackle the gamut of problems faced by the operators.

source:myjoyonline.com