Nigeria released some funds owed to international air carriers to try and avert a crisis in the aviation sector amid warnings of flight suspensions from operators including Dubai’s Emirates airline.
The Central Bank of Nigeria released $265 million to settle ticket sales owed to airline operators, it said late on Friday.
Nigeria, Africa’s biggest economy, owes carriers $464m, the biggest amount held by any single African country, the International Air Transport Association said this month.
Overall, airlines are owed $1.6 billion from 20 countries as governments seek to retain hard currency, depriving the aviation industry of cash as it emerges from the coronavirus pandemic.
Of these blocked payments, 67 per cent are stuck in 12 countries in Africa, Iata said.
Other African states withholding funds from foreign airlines include Zimbabwe with $100m, Algeria with $96m, Eritrea with $79m and Ethiopia with $75m, Iata data indicates.
Iata previously said Nigeria’s failure to repatriate airline revenues will hurt connectivity.
Earlier this month, Dubai’s Emirates, the world's biggest long-haul airline, said it would suspend flights to Nigeria from September after difficulties in repatriating funds from Africa's most populous nation.
The airline has tried "every avenue" to address the continuing challenges to repatriate its revenue and made "considerable efforts" to start a dialogue with the relevant authorities to intervene to find a viable solution.
"Regrettably there has been no progress," an Emirates spokeswoman said in an emailed statement this month. "Therefore, Emirates has taken the difficult decision to suspend all flights to and from Nigeria, effective September 1, 2022, to limit further losses and impact on our operational costs that continue to accumulate in the market."
Lagos-based Punch Newspapers reported on Saturday that British Airways has stopped travel agents in Nigeria from selling its tickets.
Blocked remittances have plagued airlines for years, but the situation has been exacerbated by the Covid-19 pandemic that left airlines cash-strapped after two years of weak travel demand.
On August 4, Emirates said it would reduce its operations to Nigerian destinations Lagos and Abuja from August 24. The airline said at the time that if no progress was made in addressing the trapped funds issue, it would "have no choice but to take further measures".
"Should there be any positive developments in the coming days regarding Emirates’ blocked funds in Nigeria, we will of course re-evaluate our decision," the airline said. "We remain keen to serve Nigeria, and our operations provide much-needed connectivity for Nigerian travellers, providing access to trade and tourism opportunities to Dubai, and to our broader network of over 130 destinations.”
Nigeria, which earns about 90 per cent of its foreign exchange from oil, is struggling to produce due to pipeline theft and years of underinvestment.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
Race card
5pm: Maiden (PA) Dh80,000 (Turf) 1,600m
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m
6pm: Arabian Triple Crown Round-1 Listed (PA) Dh230,000 (T) 1,600m
6.30pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 1,400m
7pm: Maiden (PA) Dh80,000 (T) 1,200m
7.30pm: Handicap (TB) Dh100,000 (T) 2,400m
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