Mesfin Tasew Bekele, Chief Executive Officer of the Ethiopian Airlines Group, lamented the exorbitant taxes imposed by African governments on airlines and other businesses with little infrastructure.
Speaking at the Business and Policy Dialogue, called, ‘Kwahu Summit on Africa’s Prosperity’organized by the African Prosperity Network (APN) in collaboration with the AfCFTA Presidency and Secretariat, on January 28, 2023, he said that airline fares in Africa are very expensive compared to airlines in other jurisdictions.
“Many countries believe that air transport is good for the rich and should be taxed. I can give you an example, a plane ticket between Lomé and Accra, 50% goes to the government and other taxes. This makes air transport expensive to use in Africa compared to other countries. It is understood that African governments want to generate revenue and pay airline taxes. But taxes must be sufficient… We do not have tax problems in the US, Europe, the Middle East, and Asia. sir Bekele cried
He called on African governments to benchmark their tax systems on airlines.
“We have tax problem only in Africa, why? I think the government should benchmark the tax system on indigenous airlines, this is dwarfing African indigenous airlines by making the fares very expensive and unaffordable for Africans. But at the same time, a different tax regime applies to airlines in Africa. Let me be honest with you, small airline offices in Africa are often closed due to unreasonable taxes, we need to correct this. Again, infrastructure. For air transport to be safe, and efficient, we need to have enough airports and upgrade the existing ones..
Mr. Ofori-Atta responded to the Chief Executive Officer of the Ethiopian Airlines Group, saying, “So I listened to my friend from Ethiopian Airlines, and yes we must make sure that we create a tax friendly continent”.
He added, “They want us in the government to support the infrastructure and ensure that you fly easily around the continent. This is a very difficult balance and I think we should at least mention it. And to represent the difficulties facing African finance ministers. How to build infrastructure and not tax and still increasing intra-African trade? That is our challenge”.