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Business News of Tuesday, 26 June 2018


17.5% VAT removal increased domestic air travel – Aviation Minister

Cecelia Dapaah, the Aviation Minister play videoCecelia Dapaah, the Aviation Minister

The Minister for Aviation, Cecilia Abena Dapaah, has said the removal of the 17.5% VAT on domestic airfares has led to a reduction in domestic airfares, which has led to an increase in the number of domestic air transportation.

According to her, domestic passengers throughout May to December 2017 was 323, 754 as against 295, 278 for the same period in 2016.

She noted that “fares are revised periodically by domestic airline operators according to the peak and off-peak.”

“Africa World Airlines (AWA) revised and published its fares for the peak season. The revised fares ranged between GHC285-395 from Accra-Kumasi, GHC335-445 from Accra-Tamale and GHC275-365 for Accra-Takoradi.”

She was responding to a question posed by Kwame Governs Agbodza, the Member of Parliament for Adaklu Constituency, who wanted to find out whether the removal of the 17.5 VAT on domestic airline tickets has led to the reduction of domestic airfares.

Madam Dapaah indicated that following the tax abolishment, the Ministry engaged domestic airline operators to ensure that the intervention reflected in the reduction of domestic airfares.

“For instance, domestic airfares from May to November 2017, in the case of Starbow reduced from GHC375 to GHC315 from Accra-Tamale and GHC315 to GHC216 for Accra-Kumasi and Accra-Takoradi,” she said.

She added that Africa World Airlines (AWA) reduced “domestic airfares from within the range of GHC375-500 to GHC320-400 from Accra-Tamale and GHC315-400 to GHC270-340 from Accra-Kumasi and Accra-Takoradi.”

Madam Cecilia Abena Dapaah further stated that the Ministry has taken lessons from the reduction of 25% on aviation fuel by the previous government where the intervention did not reflect in the reduction of tickets prices and other related charges as envisaged.

She said, “the Ministry intensified its monitoring on the domestic operators in the setting of domestic airfares to ensure that it meets the expectations of government and the travelling public.”