Top Tier Bank’s Aircraft Grounded Over N1.9bn Unpaid Import Duties

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The Federal Government, through the Nigeria Customs Service (NCS), has grounded a United States-registered Gulfstream G650ER jet belonging to a prominent Nigerian bank due to N1.9 billion in unpaid import duties. This move marks the beginning of a government crackdown on private jet owners over unpaid import duties totaling billions of naira.

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This action follows the launch of a one-month verification exercise for private jet owners in the country, which began on June 19, 2024, and is set to conclude on July 19, 2024. The exercise aims to identify private jet operators who have illegally imported aircraft without paying the necessary import duties.

A similar exercise conducted in 2019 recovered approximately N2 billion for the government. Currently, at least 80 private jet owners are expected to present their import documents and aircraft certificates of registration to the Customs in Abuja during the verification period.

Despite the official grounding of private jets slated to begin after the one-month verification, the NCS has already taken action due to attempts by some operators to export their aircraft to evade the process. Last week, the NCS noted that some foreign-registered private jet operators were temporarily flying their aircraft out of Nigeria to avoid the verification.

An investigation by The PUNCH revealed that a luxury Gulfstream G650ER, registered as N331AB, owned by a tier-1 bank, was grounded at Lagos airport over unpaid import duties estimated at N1.9 billion. The NCS has written to the Nigerian Civil Aviation Authority (NCAA) and the Nigerian Airspace Management Agency (NAMA) to cancel the flight clearance approval for the aircraft.

The NCS assessed the N1.9 billion duty based on a 2021 verification exercise. With the current exchange rate, the duty might rise to about N6 billion. Aircraft import duties are calculated based on prevailing exchange rates.

The NCAA and NAMA confirmed receiving the letters to cancel the flight clearance for the Gulfstream G650ER. According to the letters, the luxury aircraft, valued at over $65 million, contravened Federal Government import duty regulations and was denied the necessary Export Permit by the NCS at Murtala Muhammed Airport, Lagos.

The letter titled “Re: Cancellation of Flight Clearance Approval for Gulfstream G650ER with Registration N331AB and Manufacturer’s Serial Number 6487” stated, “The above subject matter refers. The Nigeria Customs in its drive for enhanced revenue collection decided to do a verification exercise on private airlines operating in Nigeria. The verification aims to identify privately owned aircraft that were inappropriately imported into the country. This will enable the Service to perfect these Imports and collect revenue accruable to the Federal Government. The above-cited aircraft has been found to have contravened the Federal Government’s import duty regulations and as such denied Export Permit by the Customs Service (MMIA Command). In furtherance to the above, we are soliciting your kind co-operation and assistance to deny flight clearance approval.”

NCS Comptroller General Adewale Adeniyi recently noted that many private jets were leaving Nigeria as the verification exercise began. He stated, “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.”

Adeniyi explained that the verification exercise aims to confirm whether aircraft are operating within the law. According to the customs boss, international aviation regulations require private jets operating in Nigeria to pay duty unless they are in the country temporarily.

Private aircraft owners must present various documents for the verification exercise, including the aircraft Certificate of Registration, NCAA Flight Operation Compliance Certificate, NCAA Maintenance Compliance Certificate, NCAA Permit for Non-Commercial Flights, and Temporary Import Permit (if applicable).

The government’s latest clampdown on improperly imported private jets follows a similar action more than a year ago. In recent years, the government has sought to recover import duties from private jet operators who used loopholes to evade payment. Some operators paid the mandatory import duty after significant steps were taken by the Hameed Ali-led NCS, but many still owe.

Private jet operators often exploit technical loopholes in regulations to obtain a Temporary Import Permit (TIP) instead of paying import duties. The TIP, valid for an initial 12 months and extendable twice by six months, is often indefinitely extended by operators to avoid paying import duties.

The current leadership of Customs appears determined to ensure all operators pay the import duty. Unconfirmed sources estimate that the government could recover up to N100 billion in unpaid import duties due to the high exchange rate, especially if a 25 percent penalty fee for delayed payment is implemented alongside the statutory 5 percent import duty.

National Public Relations Officer of NCS, Abdullahi Maiwada, recently confirmed the verification exercise. In 2021, owners of 17 foreign-registered private jets, including top business moguls, commercial banks, and other affluent Nigerians, took the Federal Government to court to stop the grounding of their planes over import duty defaults. This followed the Federal Government’s decision to ground 91 private jets over unpaid duties totaling over N30 billion.

In 2021, the NCS review of import duties on private jets brought into Nigeria since 2006 cleared 57 jets for commercial charter operations, while 29 jets were found liable for import duty. Another 62 jets, whose owners failed to appear for verification, were also listed as liable for duty payment.

Charles Akpeji
Charles Akpejihttps://naija247news.com
Charles Akpeji has over 20 years experience in journalism and he is Naija247news Taraba Correspondent. He lives and works from Jalingo, the state capital.

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