Private Jet Owners Sue Govt Over N30bn Tax

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Nigerians owning foreign-registered private jets have sued the Federal Government to prevent the government from grounding their planes for allegedly refusing to pay import duties. The owners include top business moguls, top banks, and other rich Nigerians.

91 private jets belonging to wealthy Nigerians were grounded by the Nigeria Customs Service in November over their alleged refusal to pay import duties amounting to over N30 billion.

After presidential approval, the NCS directed the Nigerian Civil Aviation Authority, the Federal Airports Authority of Nigeria, and the Nigerian Airspace Management Agency to ground the affected private jets immediately.

Due to inter-agency rivalry and disagreements, the relevant government agencies were unable to ground private jets.

However, in the past few months, the Customs has been making underground moves to perfect the process of grounding private jets whose owners failed to pay the import duty, multiple sources close to the development confirmed to the press on Tuesday.

17 jet owners

Also, further findings by our correspondents over the weekend revealed that at least 17 private jet owners had gone to court to stop the Federal Government from implementing the order.

According to court papers seen by the press, the jet owners are seeking a judicial review as to whether it is lawful for them to pay the controversial import duty on their private jets or not.

The jet owners had sued the government using foreign shell companies and trustees through which the foreign-registered jets were purchased.

Oftentimes, Nigerians and corporate bodies buy their foreign-registered private jets through foreign shell companies and trustees. Experts believe they often prefer to register the jets in foreign countries like the United States, United Kingdom, and Isle of Man, among others, to preserve the value of the aircraft in the event they want to sell it, as well as pay cheaper insurance premiums.

The latest findings showed that the jet owners had approached the Federal High Court Abuja seeking the court to determine, among other things, if they were liable to pay import duty.

The suit, with number FHC/ABJ/CS/1565/2021, is described as the matter of an application for judicial review by a foreign registered aircraft against the Nigeria Customs Service and Nigeria Civil Aviation Authority.

According to the court document, the 17 applicants, which are mostly foreign companies of the Nigerian jet owners are: Aircraft Trust and Financing Corp Trustee, UAML Corp, Bank of Utah Trustee, Masterjet AVIACAO Executive SA, and Cloud Services Limited.

Others are MHS Aviation GmbH, Murano Trust Company Limited, Panther Jets, SAIB LLC, Empire Aviation Group, and Osa Aviation Limited.

The list also includes BUA Delaware Inc, Flying Bull Corporation Limited, Air Charter Inc, Sparfell Luftahrt GmbH, WAT Aviation Limited, and ATT Aviation Limited. The NCAA and Customs were listed as respondents.

In a written address in support of the first respondents’ objector notice of preliminary objection, the court paper read in part, “The brief facts of this case are that the first respondents, having discovered that some operators of aircraft imported them under the guise of Temporary Importation Permit, were permanently imported into Nigeria and given TIP status to evade payment of lawful customs.”

A hearing date is yet to be fixed for the suit, according to preliminary findings by our correspondent.

However, there are strong indications that the NCS is making frantic efforts to get the private jet owners to pay the import duty.

Multiple sources confirmed on Tuesday that the NCS was not giving up on the decision to collect the revenue on behalf of the Federal Government, having obtained a presidential approval on the matter.

It was gathered that the agency might take a major decision on the matter very soon. It was further learned that Customs in possession of government documents indicate that private jet owners are by law required to pay import duty.

NCAA reacts

However, the spokesperson for NCAA, Mr Sam Adurogboye, said he was yet to be briefed but noted that “’If a case is filed against an individual or organisation, what is to be done is to put up appearance and defend oneself.”

The NCS had in March last year embarked on a review of import duties paid on private jets brought into the country since 2006.

Following the alleged discovery that several private jet owners, under the guise of Temporary Import Permit, had failed to pay the statutory import duty to the coffers of the government, the CG of Customs, Hameed Ali, set up a verification panel to review all TIPs and the relevant aircraft import documents of all private jets in the country.

At the end of the 60-day exercise, 57 private jets, which had licences for commercial charter operations, were cleared and issued with Aircraft Operators Certificate by the Customs.

However, 29 private jets, whose owners came for the verification, were found to be liable to pay the import duty.

The Customs also compiled a list of another 62 private jets whose owners failed to appear for the verification exercise but were found liable for import duty payment.

However, other private jet owners seeking to pay their import duties were given a 14-day ultimatum to clear the debts.

It is unclear the number of jet owners that later paid the duty.

However, a list of 91 private jets whose owners had failed to present themselves for the import duty payment was presented to the NCAA, FAAN, and NAMA for the immediate grounding of their operations.

Some owners of the 91 jets reportedly wrote protest letters to the NCS, arguing why they could not pay the import duty because the jets were under lease payments.

The Customs, in its response to the letters, queried the rationale for bringing in the planes and allegedly fraudulently exporting them under questionable documentation processes in the past 10 years.

Unconfirmed officials had said the Ministry of Aviation directed the NCAA, FAAN and NAMA to suspend the grounding of the flight operations of the affected private jets.

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