Cecilia Abena Dapaah, outgoing Minister of Aviation has revealed that the Ministry has abolished 17.5 percent Value Added Tax (VAT) on domestic air fares which has resulted in the increased number of domestic airline users.
Speaking at the Ministry’s Meet the Press session Monday August 20, the outgoing Minister said the Ministry in collaboration with the Ministry of Finance scrapped the tax in April 2017; barely 6 months into her administration, in a bid to make domestic air travel more affordable to the public.
The abolishment she said, was in line with the manifesto promise made by the then flagbearer of the new patriotic party (NPP), now president of the Republic of Ghana, H.E Nana Addo Dankwa Akuffo Addo.
“This was in fulfillment of his vision and I think domestic air benefited greatly from this” she stated.
Following the abolishment, Mrs. Dapaah said, the ministry has engaged domestic airline operators to ensure that the intervention reflected in the reduction of domestic air fares. The policy, she said, was reflected in the reduction of domestic airfares, through the ministry’s intervention.
She cited examples where air fares from May to November 2017 in the cost of Africa world airlines were reduced from the range of Ghc375 to Ghc500, to Ghc320 from Ghc400 for Accra to Tamale and Ghc350 to Ghc450 to Ghc270 to Ghc340 for Accra-Kumasi and Accra to Takoradi.
“The policy also had an effect on domestic passenger numbers. For instance, domestic passenger throughput increased from 302,270 as at September 2016 to 373,429 in the same month of 2017, representing a 23.5% increase”, she added.
The Ministry had also initiated Bilateral Air Services Agreements (BASAs) with Qatar, United Arab Emirates and Rwanda, following Cabinet’s approval for the signing of BASAs with contracting states.
BASAs allow for commercial air transport services between the two contracting countries. Ghana has also re-negotiated existing BASAs, such as the one with Nigeria, which allowed Africa World Airlines to commence daily flights to Abuja. It also commenced flights to Monrovia and Freetown, based on existing BASAs.