FG Grounds Bank Private Jet Over Unpaid Import Duties

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FG Grounds Bank Private Jet
FG Grounds Bank Private Jet Over Unpaid Import Duties

FG Grounds Bank Private Jet Over Unpaid Import Duties—-The Federal Government, through the Nigeria Customs Service (NCS), has grounded a United States-registered Gulfstream G650ER jet owned by a leading Nigerian bank.

This action marks the start of a clampdown on private jet owners who owe billions in unpaid import duties.

The grounding comes two weeks after the NCS initiated a one-month verification exercise for private jet owners, which started on June 19, 2024, and will end on July 19, 2024. The exercise aims to identify private jet operators who have illegally imported aircraft without paying the necessary duties.

During a similar exercise in 2019, the NCS recovered about N2 billion for the government. This year, at least 80 private jet owners are expected to present their import documents and aircraft certificates of registration to Customs officials in Abuja.

Although the official clampdown on non-compliant private jets is set to begin after the verification exercise, some operators have already started exporting their aircraft to evade scrutiny. Last week, the NCS noted that some operators of foreign-registered private jets were temporarily flying their aircraft out of the country.

Recent findings revealed that a luxury Gulfstream G650ER, with registration number N331AB and manufacturer’s serial number 6487, owned by a tier-1 bank, has been grounded at Lagos airport over N1.9 billion in unpaid import duties. This amount could rise to about N6 billion based on the current exchange rate. The NCS has requested the Nigerian Civil Aviation Authority (NCAA) and the Nigerian Airspace Management Agency (NAMA) to cancel the flight clearance approval for this aircraft.

The NCS, under the leadership of Comptroller General Adewale Adeniyi, is determined to enforce compliance. Adeniyi mentioned that many private jets had left Nigeria to avoid verification, and only a few owners have come forward. The NCAA’s data shows many private jets operating in Nigeria have not paid customs duties, prompting this verification exercise.

In 2019, a similar exercise fetched N2 billion in a short period. Despite efforts to collect duties, many private jet operators have used technical loopholes to avoid payment. These loopholes include obtaining a Temporary Import Permit (TIP) instead of paying the statutory import duty. The TIP is valid for an initial period of 12 months and can be extended twice by six months each.

With the new leadership, the Customs Service aims to close these loopholes. If the government enforces the 25% penalty fee for delayed payments, in addition to the statutory 5% import duty, the NCS could recover close to N100 billion from unpaid import duties.

In 2021, 17 owners of foreign-registered private jets, including top business moguls and leading banks, took the Federal Government to court to prevent the grounding of their planes over alleged import duty defaults. Despite this, the NCS has continued its efforts to ensure compliance.

The ongoing verification exercise and subsequent clampdowns indicate a serious effort by the Federal Government to recover unpaid import duties from private jet owners. With significant financial stakes and legal implications, the coming weeks will be crucial in determining the effectiveness of this initiative.

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