Due to suspected unpaid import tariffs of N1.9 billion, aircraft were forced to land.
The Federal Government, acting through the Nigeria Customs Service, has grounded a Gulfstream G650ER aircraft registered in the United States that belonged to a major Nigerian bank. The government is starting to take action against private jet owners who have unpaid import duties amounting to billions of naira.
Just two weeks had passed since the NCS started a one-month verification process for the nation’s private jet owners. Commencing on June 19, 2024, the exercise is anticipated to conclude on July 19, 2024.
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The exercise is intended to identify private jet operators who have unlawfully transported aircraft into the nation without covering the required import duties.
When a similar procedure was conducted in 2019, the customs had recovered around N2 billion into the government coffers.
During the one-month program, at least 80 owners of private jets are anticipated to show the Abuja Customs office their import documentation and aircraft certificate of registration.
It is anticipated that the one-month Customs verification exercise will result in the grounding of private jets that do not pay the required import duty; however, investigations revealed that efforts by certain operators to export their aircraft may have compelled the NCS to start cracking down on certain private jet operators.
Some operators of privately registered foreign aircraft were reportedly temporarily taking their aircraft out of the nation,
according to a report released by the Nigeria Customs Service last week. in an effort to avoid the activity.
The Viztadaily News, however, stated on Sunday that unpaid import duties—which are purportedly believed to be worth N1.9 billion—were the reason behind the grounding of a tier-1 bank’s luxurious Gulfstream G650ER aircraft at Lagos airport.
The Nigerian Civil Aviation Authority and the Nigerian Airspace Management Agency were reportedly contacted by the NCS, who requested that they revoke the private aircraft’s flight clearance authorization.
According to information obtained by our correspondent, the agencies had been sent letters to distrain the Gulfstream G650ER, a US-registered aircraft with the manufacturer’s serial number 6487 and registration number N331AB.
The Gulfstream G450 and Gulfstream G550 aircraft, which the bank formerly owned, are said to be worth approximately N1.9 billion in outstanding import charges that it owes the government. The sources have subsequently left the nation.
It was also acknowledged that a verification exercise conducted by the NCS in 2021 served as the basis for the N1.9 billion assessment.
According to information obtained, the N1.9 billion might increase to almost N6 billion at the current exchange rate. The current currency rate is used to calculate the import tariffs on aircraft.
The cancellation of the flight clearance approval for the Gulfstream G650ER aircraft that had been previously granted was announced by NCAA and NAMA officials.
In the letter, the Customs Service Area Command at the Murtala Muhammed Airport in Lagos stated that the luxury aircraft, which cost more than $65 million, was refused the required export permit because it had violated the Federal Government’s import tariff standards.
One of our correspondents saw a copy of a letter addressed to the NCAA and NAMA, bearing the headline ‘Re: cancellation of flight clearance approval for Gulfstream G650ER with authorization N331AB and manufacturer’s serial number 6487.’
‘The subject matter mentioned above refers,’ the letter stated in part. As part of its efforts to increase revenue collection, Nigeria Customs decided to carry out a ‘verification exercise on private aircraft flying in Nigeria.’
‘The verification seeks to locate privately owned airplanes that were brought into the nation without authorization. The Service will be able to perfect these imports and gather money owed to the federal government as a result.
The aforementioned aircraft was deemed to have violated the import tariff requirements of the Federal Government, and as a result, the Export Permit was revoked by the Office of Customs (MMIA Command).
‘In light of the aforementioned, we kindly request your cooperation and support in order to refuse flight clearance approval.’
A considerable number of private jets were departing the country as the verification process got underway, according to the Comptroller General, NCS, Adewale Adeniyi, two weeks ago.
This was revealed by Adeniyi in an interview with Arise Television, who said that not many owners had participated in the exercise since it began.
We have information that a significant portion of these [private jet operators] are leaving Nigeria after the announcement was made because they would not want to be verified, and very few of them have shown up for verification,’ he stated.
The private jet verification exercise was implemented by the service, as the CGC clarified, because An increasing number of private aircraft were flying beyond the law.
‘This verification is being brought up because we have observed a large number of these aircraft flying, and our records indicate that only a small number of them have reported for duty.’
Only a small percentage of the numerous private aircraft operating in the nation have paid customs fees, according to statistics released by the CGC from the Nigerian Civil Aviation Authority.
According to Adeniyi, the agency realized N2 billion at the beginning of the exercise in 2019.
‘Keep in mind that we have done this before. We conducted an activity similar to this in 2019 and it brought in N2 billion in a short period of time. that we succeeded.
We found that more private aircraft are in operation in Nigeria but are not subject to legal restrictions. According to the NCAA statistics, very few of them paid customs duty in order to operate in Nigeria, the speaker said.
The head of customs claims that international aviation laws mandate that private aircraft operating within the nation must pay duty.
‘They are not required to pay any duty if they are here on a temporary importation visit, meaning they are free to leave the Nigerian airspace after a brief stay.
However, they must pay duty after they arrive and are utilized in Nigeria.
The purpose of the verification process, according to the CGC once again, was to verify’ aircraft operating within the ambit of the law and those that are operating outside the law.’
Private aircraft owners are required to bring certain documents for the verification procedure, including the aircraft certificate of registration, the flight operation compliance certificate from the Nigerian Civil Aviation Authority,
the maintenance compliance certificate from the NCAA, the NCAA permit for unrelated to and not flights, and the indefinite import permit (if applicable), corresponding to a notice from Customs.
Over a year after the Federal Government halted the operation, operators of privately owned aircraft that were improperly imported were subject to the most recent crackdowns.
Over the last three years, the government has intended to recoup billions of naira in import duties from private jet operators who exploited specific technological vulnerabilities to Avoid paying import duties.
After the NCS led by Hameed Ali made some major moves to reclaim the revenue, a few owners of private jets paid the obligatory import duty. Nonetheless, a number of private aircraft owners and operators in the nation have not yet paid the required amount.
It is said that a large number of private aircraft operators in the nation have looked into technical gaps in the regulations in order to illegally get a Temporary Import Permit from the Nigeria Customs Service rather than paying the required import duty on their imported aircraft.
The regulations state that the TIP may be renewed twice by six months after its initial 12-month validity.
Nevertheless, a number of private aircraft operators in the nation have kept the TIP extended indefinitely, a development that gave rise to previous Customs clampdowns.
At least 80 private jet operators are anticipated to submit their aircraft import documentation for verification during the one-month exercise, according to recent data.
According to certain stakeholders, the TIP is a dishonest way to avoid paying the required import duty. It is envisaged that importers of private aircraft, particularly those registered outside, will pay import duties equal to five percent of the aircraft’s worth.
But according to Customs officers, some owners frequently choose not to pay the import since private planes are expensive.
According to the operators, who would rather get a TIP by pretending that the aircraft is only going to be in the nation temporarily, The International Civil Aviation Organization Convention, Article 24, addresses the waiver of customs for commercial aircraft that are temporarily operating in a nation.
But Customs’ new administration seems ready to force all companies to pay the import duty.
According to unreliable sources, the high exchange rate could result in the government receiving close to N100 billion in unpaid import duty on private aircraft imports.
This study, however, is contingent upon Customs’ decision to impose the 25% penalty cost that owners of such aircraft are required to pay for late payments. In addition to the mandatory 5% import duty, there is a 25% penalty cost.
Abdullahi Maiwada, the NCS’s National Public Relations Officer, has confirmed that the verification process, which started two Wednesdays ago, is real.
Every now and then A group of wealthy Nigerians, prominent businessmen, and major commercial banks, along with roughly 17 other foreign-registered private jet owners, sued the Federal Government in 2021 to prevent the grounding of their aircraft due to suspected import duty delinquency.
This happened when the Nigeria Customs Service, acting on the recommendation of the Federal Government, grounded about 91 private aircraft for allegedly not having paid over N30 billion in import duties.
A review of import tariffs paid on private jets imported into the nation since 2006 was started by the NCS in 2021.
After the 60-day experiment, the Customs cleared and issued Aircraft Operators Certificates to 57 private planes that were licensed for commercial charter operations.
29 private aircraft, however, whose Owners who arrived for the verification were discovered to be responsible for paying the import duty.
In addition, 62 private aircraft owners who were judged to be responsible for paying import duties but did not show up for the verification exercise were included in the list that the Customs had produced.
