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Domestic air travel shoots up by 26%

Deputy Finance Minister, Kwaku Kwarteng has disclosed that there has been a 26 percent increase in patronage of domestic airlines since the abolition of the VAT on domestic air fares.

The 2017 budget heralded the abolition and review of some 12 key taxes.
They included the 17.5% VAT on domestic air fares, the 17.5% VAT on financial services as well as the 5% on real estate.

According to the government, the move is 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.

Speaking on the floor of parliament, Kwaku Kwarteng also stated that government will soon report on the outcome of all reforms so far undertaken by the government.

“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 favorable.”

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.

The passenger volume at the time witnessed an increase from 163,322 to 201, 851 between May 2016 and the same period in 2017.

According to him, the other expansion works at the various airports are expected to increase domestic travels by the end of year.

“The Ministry remains committed to government’s pledge to encourage and support local airlines and entrepreneurs to set up strong private airlines that can fully utilize the nation’s route rights. In line with this, the Ministry has obtained approval from the Nigerian Ministry of Aviation for Africa World Airlines to commence operations to Abuja in addition to its Lagos route.”

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