Customs Duty: Foreign Registered Private Jets Pay $6, 960, 000 to FG Annually

Chinedu Eze

Charter service operators have faulted the insistence of the Nigeria Customs Service (NCS) to collect duties on foreign registered aircraft, saying the federal government already earns over $6, 960, 000 (N11.1billion) annually as registration and charges from about 60 private jets with foreign registration that operate in Nigeria.

The operators stated that pressure from Customs may force these aircraft operators to relocate from Nigeria to nearby countries, where they would register and come to Nigeria to provide their services.

Reports indicate that the NCS was poised to ground the operations of private jets that refuse to pay import duties and may use the Nigerian Airspace Management Agency (NAMA) to deny start-up to those aircraft until their owners or operators pay the duties accruing to them.

However, operators of private jets said the federal government already earns from the foreign registered aircraft revenues that are way more than the import duties the Customs was requesting from them and that some of the aircraft may be taken out of the country if Customs continue to disturb them.

THISDAY spoke to the Chairman and Chief Executive Officer, Quits Aviation Services Limited, Sam Iwuajoku, who operates the biggest business aviation terminal in Nigeria and Quits Aviation Services Free Trade Zone.

He said the federal government was already generating income from the foreign registered aircraft that operate in Nigeria.

According to him, aircraft registered with the Nigeria Civil Aviation Authority (NCAA) under Flight Operators Clearance Certificate (FOCC) and Maintenance Clearance Certificate (MCC) pay $10, 000 to the agency every six months in dollars.

 Iwuajoku, said each of these aircraft pays about $96, 000 monthly in charges and other expenses to the federal government.

 “The aircraft with foreign registration pays $10,000 to the federal government every six months for operating FOCC and MCC licences. Not only that, when they issue them the FOCC and MCC, all their fees subsequently are in dollars. So, the federal government is making huge income from them,” Iwuajoku said.

He explained further, “With the signatories Nigeria has with some countries on open sky agreement; now, before an aircraft comes to Nigeria, the person bringing the aircraft applies to Ministry of Aviation for import permits.

“When that permit is granted, the aircraft comes here to operate. If it is a foreign-registered aircraft, under the law, when the foreign-registered aircraft comes to Nigeria to operate, they apply to NCAA, which is the authority, not Ministry of Finance or Customs. “The authority will give them a permit and license to operate within certain area of the country. And that permit, if it is granted, states all places where that foreign aircraft can go. There is an aircraft in our fleet, foreign-registered aircraft; that is N-registered aircraft.

“On average, in a month, they pay the federal government $96,000. It depends on the usage. And that aircraft has been operating for about three years here in Nigeria. Now you are coming to ask them to pay duty on a foreign-registered aircraft that doesn’t fly Nigerian flag.”

Iwuajoku said what the NCS was doing was dis-incentive to investment in Nigeria and called on the federal government to call the Customs to order, noting that it does not matter who brings the money to government coffers, what was important was that government was earning money from these foreign-registered aircraft.

“We are discouraging investors. We are discouraging people. We are going against the convention (Cape Town Convention). Nigerian Customs should be called to order. Now, if you take all the revenues those foreign-registered planes bring to the federal government, it is huge and they pay in dollars.

“It doesn’t mean that you must pay duty or that the money must come through Nigerian customs. No, it can come through other government agencies. It is still the same federal government. So they should call Nigerian Customs to order,” Iwuajoku said.

The Chairman and CEO of Quits Aviation Services Limited also said the foreign registered aircraft operators could move their aircraft to Ghana, where they would pay for licence in dollars and also pay other charges and come to Nigeria to render services and after go back to their base in Ghana; so, Nigeria would lose all the revenue to their neigbouring country.

“Operating in Nigeria, yields revenue to the federal government, so they can also move their aircraft to Ghana and be operating and coming here to take services.

“By doing that you will lose employment, the federal government will lose revenue. So they should think. Nigeria Customs is not the only one that should bring revenue to the federal government, it is all government agencies,” he said.