Non-implementation of customs waiver costs airlines N500bn

Three years after the Federal Government approved waivers on Customs duties for aircraft and spare parts, indigenous airlines are yet to benefit from the policy. Airline operators said that they could have saved over N500 billion if government had implanted the policy since 2012. Managing Director of Arik Air, Mr. Chris Ndule, lamented that airlines still pay 50 per cent Customs duty on spare parts.

Speaking to woleshadare.net on the sideline of a seminar in Lagos at the weekend, the managing director said that the situation had made operations of airlines very difficult. Investigations by woleshadare.net revealed that airlines spend billions of Naira as Customs duties on aircraft and spare parts imported into the country. In most parts of Europe and the United States, the current rates of import duty on civil passengers is zero per cent in relation to small aircraft, that is those that have less than 50 seats and weigh less than 120,000 kilogramme.

The Federal Government, through the Federal Ministry of Finance, in the aftermath of Dana’s MD 83 aircraft, had sent notification letter to Nigeria Customs Service (NCS) for the commencement of the new policy while the Comptroller General of Customs had also sent a circular to his officers, but up till now, the airlines have not benefited from the gesture.
However, at a forum recently, the managing director of a helicopter firm, who pleaded anonymity, said that on the average, the airlines spend about $4 million on customs duties for aircraft acquisition.
He emphasised that if fully implemented, such funds could be used for construction of two standard maintenance hangar facilities. He warned that without the removal of this policy, Nigerian carriers would continually find it difficult to compete with their counterparts across the world. He noted: “Payment of Customs duties for aircraft and its spares only happen in Nigeria and nowhere else does this happen. A carrier pays an average of $4 million on import duties on an aircraft. That is huge.
“Aircraft are mobile resources that transport one around the world. This policy is killing the industry. If you import an aircraft, you spend 14 per cent as import duties to government,which is about $4 million for just importing an aircraft. “We are one among many other countries that enforce such law. The same apply to spare parts.
“In President Olusegun Obasanjo’s time, it was removed and we prayed that it should be removed because it was killing us and it is killing the aviation industry. “If all these taxies and levies are waived, it will greatly improve the aviation sector and boost the country’s economy.
However, the non-implementation of the waiver regime has adversely affected the importation of airplanes and spare parts, as operators are hampered in their bid to re-fleet with younger and modern aircraft to boost their operations,” he said. The managing director stressed that not a few believe that the waiver was a new development that would bring speedy development to the aviation sector.
Speaking on the issue, the President, Aviation Round Table (ART), Capt. Dele Ore, described the policy as a necessity for the growth of the industry. He explained that the Customs hierarchy had actually sent a circular to its men on the field for full implementation.
Ore, however, stated that if not implemented, the delay may be as a result of bureaucracy usually associated with government policies, but assured that government would see to the full implementation of the policy.

Wole Shadare