Friday, March 1, 2013

■ TANZANIA: Fastjet to settle $2mln in debts with Tanzanian taxman, Airports Authority as deal with 1Time said to be under "reconsideration".

fastjetTanzania based fastjet (FN), has agreed to settle debts amounting to over USD2million (TAS3.14billion) owed to both the Tanzanian Revenue Authority (TRA) and the Tanzanian Airports Authority (TAA). Previously, fastjet had claimed that the debts had been incurred under predecessor Fly540's previous owner, 540 Aviation, who were therefore responsible for them.

fastjet A320
fastjet A320 (fastjet)
Fastjet  general manager for Africa, Kyle Haywood, told a press conference earlier in the week that his company was ready to pay the debts, provided that proper TRA and TAA documents accompanied the claims.

It is understood that the LCC airline owes the TRA a total of USD1.8million (TAS2.9billion) for various government taxes and charges including Pay As You Earn (PAYE), a Skills development levy, rental taxes and stamp duties amongst others. Claims date from 2009 to 2012.
According to TRA, the preliminary audit charges of all categories of taxes outlined above are yet to be paid by the company which was registered as an airline known as Fly540 Tanzania on May 29, 2008. The TRA document further states that the audit was intended to induce voluntary compliance through an effective and efficient tax audit programme.

Further, it was  to utilise audit opportunities to educate, foster customer care hence build trust, confidence and improved compliance to the tax payer, FastJet.
Source [The Citizen]

The TAA is owed a total of USD350'000 (TAS570million) for airport service charges and landing fees.

Despite the financial set back, Haywood was adamant that fastjet had a strong future in the market and would continue to invest and expand its network, which will now include flights from Kilimanjaro to Mwanza and Zanzibar.

The same however, cannot be said about the airline's ongoing battle to secure South African LCC 1Time (T6). 

A statement released by the main South African opposition party, The Democratic Alliance, earlier this week claimed that the South African Government's continued lolly-gagging on whether to green light the deal or not has led "to Fastjet reconsidering its offer."

No official statement from fastjet has been issued regarding the matter.