FG Targets Improperly Imported Jets in New Verification Exercise

FG Clampdown on Illegal Jets, Owners Face Verification Test

Nigeria Customs Service launches verification exercise to recover unpaid import duties from private jet owners.

The Nigerian Customs Service (NCS) has launched a verification exercise to target owners of privately owned aircraft that were brought into the country illegally. At least 80 private jet operators have been ordered to produce their aircraft import documents at the NCS headquarters in Abuja. The exercise, which begins on June 19, aims to identify improperly imported private aircraft without documentation and ensure maximum revenue collection.

The NCS has warned that private jet operators and owners must provide certain paperwork, including the Certificate of Registration, Maintenance Compliance Certificate, Permit for Non-Commercial Flights, Flight Operation Compliance Certificate, and Temporary Import Permit (if applicable). This is the second crackdown on privately owned aircraft in over a year, as the government seeks to collect billions of naira in import tariffs from private jet operators who have been avoiding payment for years.

According to a top official, at least 80 private aircraft operators are expected to participate in the verification exercise, including operators of 20 private aircraft imported since the last verification exercise. Some private aircraft operators have allegedly taken advantage of legislative gaps to deceitfully acquire a Temporary Import Permit (TIP) from the NCS, circumventing the mandatory import duty on their imported aircraft.

The TIP can be renewed twice for a total of six months after its initial 12-month tenure expires, under the regulations. However, Customs has carried out crackdowns because many private aircraft operators in the country have continued to extend the TIP indefinitely, characterizing it as a dishonest means of avoiding the import duty. Import duty on private aircraft, particularly those registered overseas, is five percent of the aircraft's worth.

Customs officials claim that some owners frequently choose not to pay the levy because private jets are expensive. Instead, operators would rather receive a TIP, stating that the aircraft is temporarily entering the country in accordance with Article 24 of the International Civil Aviation Organization Convention, which waives customs fees for commercial aircraft temporarily operating in a nation.

The new Customs leadership is committed to ensuring every operator pays the import charge. Unverified reports claim the government may recover around N100 billion in unpaid import duties, contingent upon Customs' decision to impose the 25 percent penalty fee on aircraft owners for late payments. It's unclear if private aircraft owners will comply with government regulations and pay the tax, as some operators have previously filed lawsuits to stop the government from getting the money.

Abdullahi Maiwada, the NCS's National Public Relations Officer, confirmed on Monday that the verification process is set to start on Wednesday, June 19. Maiwada said, “All we are doing is to ensure maximum revenue collection for the Federal Government. Relevant sections of our extant laws and regulations will guide our actions and inaction during and after the exercise.”

In 2021, 17 foreign-registered private jet owners, including prominent business magnates, top commercial banks, and other affluent Nigerians, took the Federal Government to court to stop their aircraft from being grounded due to purported import duty arrears. The legal action came after the Nigeria Customs Service's decision to ground around 91 private jets for allegedly not paying import tariffs totaling more than N30 billion was approved by the Federal Government.

The Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), and the Nigerian Civil Aviation Authority (NCA) had all received a directive from the NCS to ground the private aircraft immediately. However, the relevant government authorities were unable to bring the private jets to a stop due to conflicts and inter-agency rivalry.

The owners of the private jets filed a lawsuit against the government, requesting a judicial review to see if they could legally pay the disputed import charge on their aircraft. Using the foreign trustees and dummy companies that were used to buy the foreign-registered jets, they launched the complaint. Foreign trustees and shell corporations are frequently used by Nigerians and business entities to acquire their foreign-registered private jets.

Experts say Nigerians prefer to register their private aircraft in countries like the US, the UK, and the Isle of Man to preserve the aircraft's value for future sale and to take advantage of cheaper insurance rates. The NCS began reviewing import taxes paid on private aircraft brought into the nation since 2006 in 2021. Comptroller General of Customs Hameed Ali reportedly discovered that many private jet owners had utilized the Temporary Import Permit (TIP) to evade paying statutory import duties.

Consequently, he formed a verification panel to examine all TIPs and pertinent aircraft import documents for private jets operating in the nation. 57 private aircraft with commercial charter licenses were cleared by Customs and given Aircraft Operators Certificates at the conclusion of the 60-day experiment. Nevertheless, the owners of 29 private aircraft that took part in the verification were discovered to be responsible for unpaid import duties.

Additionally, Customs created a list of 62 private aircraft whose owners were judged to be responsible for import duty payments despite their failure to show up for the verification exercise.