Taxes make Ghana Airports uncompetitive

THE imposition of certain taxes on the operations of the Ghana Airports Company Limited (GACL) is making the country’s only major international airport unattractive to many other airlines across the world.

The taxes which include the Value Added tax (VAT) on the safety of critical goods and services is said to be escalating charges to the extent of making the vibrant airport uncompetitive within the sub-region.

The Managing Director of the company, Mrs Doreen Owusu-Fianko, who disclosed this at the maiden annual general meeting of the company in Accra, said, “consequently, the Kotoka International Airport (KIA) is fast becoming an unattractive destination for most airlines and consequences may affect the version of making Ghana a gateway to West Africa.”

She also indicated that the imposition of any tax on aeronautical revenue and payment into the general consolidated fund for general use was frowned upon by the International Civil Aviation Organisation (ICAO).

“Even though Ghana is a signatory to the ICAO conventions, particularly ICAO DOC 8632: (ICAO’s policies on taxation in the field of international air transport), Ghana is yet to be fully compliant,” Mrs Fianko added.

She added, “indeed, ICAO and the International Airline Transport Association (IATA) have to be furnished with financial statements of civil aviation organisations as a monitoring mechanism.”

In spite of the challenges, Mrs Fianko said the GACL was ready to make great strides to ensure that the KIA would become the gateway to the sub-region.

“The outlook is bright as we plan to leverage the stability of the country to attract more airlines into the country and also improve facilities at the regional airports to help improve domestic transportation of people and goods for economic development,” she said.

The company achieved a profit before tax of GH#¢15,296,888, in 2010, representing an increase of 156 per cent over the previous year’s figure of GH¢5,967,384.

That achievement, according to the GACL MD, is as a result of “improved revenue and effective cost management practices.”

Operational income also increased by 30 per cent, moving from GH¢40 million in 2009 to GH¢52 million in 2010 in spite of the global financial crisis that negatively affected air travels.

Airside revenue also grew by 23 per cent from GH¢7.7 million in 2009 to GH¢9.5 million in 2010 on the back of the frequency of airlines flying into the country such as Virgin Atlantic, United Airlines and Brussels Airlines.

Other areas of the company’s operations that also saw some marked improvements were the airport passenger service charge which grew from GH¢19 million in 2009 to GH¢27 million while that of aeronautical revenue which comprised rental income, car park revenue, royalties and other revenues recorded a growth of 20 per cent to Gh¢15.9 million in 2010.