Import duty: FG may ground 60 private jets today + Top bank chairmen, business moguls to be affected

 

 

 

 

 

 

 

 

 

 

The Federal Government, through the Nigerian Customs Service, will on Monday (today) ground over 60 private jets owned by very important persons in the country over unpaid import duty running into several billions of naira..

According to documents exchanged between the NCS and the Nigerian Airspace Management Agency, which were exclusively sighted on Sunday, the enforcement exercise will commence on October 14th, 2024.

There are reports that duties are not being paid on the majority of private jets currently in the country with the NCS seeking to recover unpaid import duties running into several billions of naira.

The development reportedly led the NCS to carry out a one-month verification exercise on all private jet owners in the country between June and July.

The latest decision to ground the private jets is coming almost three months after the NCS verification exercise.

Meanwhile, the documents sighted on Sunday showed that private jets belonging to some top business moguls, including chairmen and top executives of some banks would be stopped from flying.

Already, top private jet owners, who will be affected by the decision, have been officially notified by the NCS.

According to the documents, the majority of the affected planes are foreign-registered private jets owned by Nigerians.

Some of the luxury aircraft on the list are: Bombardier Challenger 604 CL-600-2B16, Bombardier Challenger 3500, Bombardier BD-700 Global 6000, Bombardier BD-700 Global 6500, Bombardier BD-700 Global 7500. Each of the Bombardier BD-700 Global 7500 are estimated to cost over$70m, while the Global 6500 and 6000 version cost over $50m.

While 11 private jet owners have received notification of the grounding of their aircraft, it was gathered that no fewer than 55 other operators would get their letters on Monday (today).

This came as it was gathered that some top private jet operators had lobbied the Presidency ahead of the Monday grounding exercise but our correspondent learnt that the Presidency refused to interfere in the process.

The development, it was learnt, had made some operators to begin the process of settling the import duty. Officials said some private jet owners had promise to settle the duty this week.

Already, operators of a United States-registered Gulfstream G650ER jet belonging to a leading Nigerian bank have reportedly paid N5.3bn import duty to avoid the clampdown exercise.

The Customs had recovered some duties into the government coffers when a similar exercise was carried out in 2019.

But in the letters sighted on Sunday, planes belonging to prominent individuals and corporate entities were restricted from flying until the outstanding duties were settled.

This enforcement action is expected to generate significant revenue for the government.

However, three of these aircraft slated for grounding effective today, had been reportedly flown out of the country. However, the jets will be grounded as soon as they return to the country.

According to officials, who spoke on condition of anonymity because they lacked the authority to speak on the matter, the Nigerian Customs Act of 2023 empowers the customs service to penalise the owner or importer of any goods illegally imported into the country.

The official added that the NCS had issued demand notes to all affected owners and importers, instructing them to pay outstanding duties on their private aircraft.

While some aircraft owners have entered negotiations with the NCS to settle the outstanding payments, others have submitted written undertakings to clear the dues upon their return to Nigeria.

It is estimated that the NCS could generate over N260bn from this enforcement exercise.

Findings showed the NCS had written to both the Nigerian Civil Aviation Authority and the Nigerian Airspace Management Agency requesting that the identified aircraft be denied flight clearances until the duties were paid, or until the NCS issues further instructions.

Additional findings revealed that four of the impounded aircraft are currently in negotiations with Customs, and their owners have agreed to pay the required duties.

In letters sighted by our correspondent, the Nigerian Airspace Management Agency acknowledged a letter from the NCS regarding the recovery of import duties on illegally imported private aircraft.

The agency issued a Notice to Airmen and directed Air Traffic Control units to ground any non-compliant aircraft starting from October 14, 2024, until cleared by the Nigeria Customs Service.

NAMA also requested that cleared aircraft details be promptly forwarded to prevent issues and ensure smooth coordination. The agency expressed its full support and collaboration to enhance transparency in flight operations and contribute to the nation’s economic well-being.

In July, the Comptroller General, NCS, Adewale Adeniyi, said some private jets were leaving the country to evade the verification exercise.

“Very few of them (private jet operators) have showed up for verification and we gather intelligence that a good number of them are leaving Nigeria since the announcement was given because they would not want to be verified,” he said.

The CGC explained that the service introduced the private jet verification exercise because more private jets were operating outside the ambits of the law.

“We have seen so many of these aircraft flying and our record tends to show that only a few of them have shown up to pay duty and this is why we are bringing this verification up,” he said.

The CGC disclosed that data obtained from the Nigerian Civil Aviation Authority revealed that though many private jets were operating in the country, only a few had paid customs duties.

“We discovered that there are more private jets that are operating in Nigeria but have not been brought under the ambit of the law. So the data that we got from the NCAA shows that only very few of them paid customs duty to operate in Nigeria,” he stated.

According to the customs boss, the international aviation regulations show that private jets flying in the country are obliged to pay duty.

“If they are here for a brief period in the Nigerian airspace and return, they are not obliged to pay any duty; that is if they are here on a temporary importation visit. But once they are here and are used within Nigeria, they are liable to pay duty,”

In the past three years, the government had planned to recover import duty running into billions of naira from some private jet operators who had used certain technical loopholes to evade the payment of import duty.

A few private jet owners paid the mandatory import duty after the Hameed Ali-led NCS took some significant steps to recover the revenue. However, several owners and operators of private jets in the country have yet to pay the statutory duty.

Many private aircraft operators in the country have allegedly explored technical loopholes in the regulation to fraudulently obtain a Temporary Import Permit from the Nigeria Customs Service instead of paying the statutory import duty on their imported aircraft.

The TIP, which is valid for an initial period of 12 months, can be extended by six months twice, according to the regulations.

However, several operators of private jets in the country have continued to extend the TIP indefinitely, a development that prompted the Customs to effect past clampdowns.

The TIP has been described by some stakeholders as a fraudulent means of evading the mandatory import duty. Importers of private jets, especially foreign registered private jets, are expected to pay five per cent of the value of the private jet as import duty.

However, due to the high cost of private jets, some owners often prefer not to pay the import, according to Customs officials.

Instead, the operators prefer to obtain a TIP under the guise that the aircraft is coming into the country for a temporary period, quoting the International Civil Aviation Organisation Convention Article 24 which focuses on Customs waiver for commercial aircraft operating in a country temporarily.

But the new leadership of Customs appears poised to get all operators to pay the import duty. (Sourced from The PUNCH)