Federal Government Set to Ground 60 Private Jets Over Unpaid Import Duty

Top Bank Chairmen and Business Moguls Affected as NAMA Receives List of Implicated Aircraft

The Federal Government of Nigeria, through the Nigerian Customs Service (NCS), is set to ground over 60 private jets owned by prominent individuals due to unpaid import duties that amount to billions of naira. The enforcement, expected to begin today (October 14, 2024), follows a one-month verification exercise carried out by the NCS between June and July of this year, aimed at identifying private jet owners who have not paid the requisite import duties.

Documents exchanged between the NCS and the Nigerian Airspace Management Agency (NAMA) indicate that the majority of private jets currently in Nigeria have not had their import duties paid, prompting the customs service to take action to recover these unpaid fees.

The private jets affected by this grounding exercise are largely foreign-registered aircraft owned by Nigerians, including top business moguls and high-ranking bank officials. Some of the luxury aircraft on the list include high-end models like the Bombardier Challenger 604 CL-600-2B16, Bombardier Challenger 3500, and several Bombardier Global models, with each jet valued between $50 million and $70 million.

Eleven private jet owners have already been notified of the imminent grounding of their aircraft, with 55 others set to receive similar notifications today. Despite some attempts by jet operators to lobby the Presidency to halt the exercise, the government’s position has remained firm, and no interference has been allowed in the customs enforcement process.

Some jet owners have started settling their import duties, with the operators of a U.S.-registered Gulfstream G650ER, owned by a leading Nigerian bank, reportedly paying N5.3 billion in import duties to avoid the clampdown. Others are expected to follow suit, with officials estimating that the NCS could generate over N260 billion from the exercise.

The grounding of these jets will be enforced by the Nigerian Civil Aviation Authority (NCAA) and NAMA, which have received directives to deny flight clearance for non-compliant aircraft until all duties are paid. NAMA has issued a Notice to Airmen and instructed Air Traffic Control units to ground the jets starting today, October 14, 2024. Aircraft that are cleared to fly after paying their duties will have their information forwarded to ensure smooth coordination.

Reports indicate that some affected jets have already left Nigeria to evade the enforcement exercise, but these planes will be grounded immediately upon their return to the country. Customs officials, citing the Nigerian Customs Act of 2023, emphasize that the NCS is legally empowered to penalize any owner or importer of illegally imported goods, including aircraft.

This latest action mirrors a similar crackdown in 2019 when private jets owned by prominent individuals and companies were grounded until outstanding import duties were settled. Some jet owners, it is said, have historically exploited regulatory loopholes, using Temporary Import Permits (TIPs) to avoid paying duties by claiming their aircraft were only temporarily in the country. These TIPs are valid for 12 months and can be extended twice by six months each, but many operators have reportedly abused this system to avoid paying the mandatory five percent duty on their aircraft.

The current leadership of the NCS has expressed determination to close these loopholes and ensure that all private jet operators pay the required import duties. This marks a shift from previous years, when enforcement was inconsistent, allowing many operators to avoid paying billions in owed taxes.

In a previous statement, NCS Comptroller General Adewale Adeniyi noted that many private jets had left Nigeria to avoid the verification process earlier in the year, with only a small percentage of operators coming forward voluntarily. Adeniyi reiterated that the new enforcement is part of a broader effort to ensure that all aircraft operating within Nigeria’s airspace are legally compliant and that the government recoups owed revenue.

The NCS maintains that under international aviation law, jets entering Nigerian airspace temporarily are not required to pay duties. However, aircraft that are based in Nigeria and used within the country are liable to pay the full import duty, a rule the NCS plans to strictly enforce going forward.

With the government determined to recover billions in unpaid duties, this move is expected to shake up the ranks of Nigeria’s wealthiest private jet owners and contribute significantly to the nation’s revenue base.

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