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FG to implement zero duty on aircraft importation, spare parts
*Carriers asked not to pay VAT
*Private jet owners exempted
In a bid to ameliorate the challenges faced by Nigerian carriers, the Federal Government has re-affirmed and concluded plans to implement the zero duty and Value Added Tax (VAT) payment on the importation of commercial airplanes and spare parts as a way of alleviating the cost burden and ensuring safe flight operations.
The gesture was extended specifically to commercial aircraft operators and not private jet operators who are required to pay for luxury taxes.
The clarification on the Zero Duty and VAT was contained in a letter dated June 20th, 2016 and signed by the Nigeria Customs Service. It stated inter alia that: “I am directed to inform you that by virtue of the Federal Government 2013 Fiscal Policy measures, Ref No. BD.12237/S.1008/T/11 dated January 15th 2013. All Commercial Aircraft and its Spare Parts imported for use in Nigeria shall attract import duty rate of zero per cent (0 per cent) and zero per cent (0 per cent) VAT respectively.”
Furthermore, the letter stated that: “I am further directed to inform you that the Honourable Minister of Finance letter Ref. No. BD/FP/TT/50/1/113 dated 20th March, 2015. Approval for the implementation of the ECOWAS Common External Tariff (CET) 2015 – 2019 and 2015 Fiscal Policy measures (National List) confirmed the extension of the 2013 Fiscal Policy measures.”
The operators under the aegis of Airline Operators of Nigeria (AON) had on June 6, 2016 sought the assistance of the Minister of State for Aviation, Hadi Sirika in tackling the myriad of problems confronting carriers in Nigeria.
They highlighted their problems to include the constraints to foreign exchange (Forex) access; availability, pricing and distribution of Jet A1; taxes on importation of aircraft and its spare parts as well as other multiple taxes including Value Added Taxes (VAT); obsolete infrastructure; upgrade of airport runways for 24 hours operations with navigational and landing aids; as well as 24hours customs clearance of spare parts for aircraft on ground (AOG) among others.
Sirika had pledged his commitment to work closely with Airline Operators of Nigeria (AON) and has taken bold steps to address the challenges being faced by domestic airlines in the country.
The Minister however assured operators that he was not oblivious of their plight and challenges.
“The players in the industry are known. Their challenges are also known, at least to me. And I am trying and working hard to drive this through government for government to understand them,” he said. “Our primary purpose in government and my duty as Minister is to promote, protect, and develop businesses,” he added.
In a statement yesterday, President of AON, Capt Noggie Meggison lauded the Federal Government for keying into the importance of aviation as one of the key drivers for economic recovery and its critical role of making Nigeria the pivot of air transportation in Africa.
His words, “We also commend the government for graciously identifying with the pains of the Nigerian travelling public by extending its support for commercial airlines in the country and reaffirming the ZeroDuty and VAT payment on the importation of commercial airplanes and its spare parts as a way of alleviating the cost burden and ensuring safe flight operations.”
Meggison noted that the unprecedented move was a welcome development and a strong testament to the commitment of Sirika and President Muhammadu Buhari led administration for feeling the pulse of the masses and making good on his promise to work assiduously to ensure that aviation doesn’t go out of the reach of the common man by givingit the attention it rightly deserves.
“AON would like to thank the Federal Government of Nigeria for giving a listening ear to our persistent calls for the removal of Duty and VAT on the importation of commercial aircraft and its parts as is done in other parts of the world.
“This is a welcome development and we commend the government for showing maturity and understanding of the critical role that aviation plays in driving the Nigerian economy thereby supporting Nigerian airlines, promoting safety and sustaining jobs.”
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