Domestic airlines to shut down as Nigeria Customs defies FG Executive order on zero duties for spares

The Nigeria Customs service has continued to defy the federal government Executive Order on zero duties for spares and commercial aircraft as it has refused to implement the order that was signed last year by President Muhamadu Buhari. As a result domestic airlines are threatening to shut down if nothing is done to call the Nigeria Customs Service to order. The decision by local airlines to tow this part was disclosed by the Chairman of Air Peace airline, Barrister Allen Onyema during the ceremony to mark the delivery of the second of the thirteen Embraer 195-E2 planes the airline has placed firm order for at the Nnamidi Azikiwe International Airport, Abuja.

According to Onyema, the Nigeria Customs are still demanding payment of duties on aircraft parts and spares. Recall the Federal Government  last year reaffirmed its zero duty policy and Value Added Tax ,VAT, waiver on the importation of commercial airplanes and its spare parts into the country. The clarification on the Zero Duty and VAT was contained in a letter dated 20th June, 2016 , signed by the Nigeria Customs Service and communicated to the airline operators . The letter 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 15th January, 2013, all Commercial Aircraft and its Spare Parts imported for use in Nigeria shall attract import duty rate of zero per cent (0%) and zero per cent (0%) VAT respectively.”

The letter added: “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.”

Speaking about the continuous harassment of domestic airline operators by Customs to pay duties on spares and parts, Air Peace Chairman said : “I plead with the federal government to talk to the customs to try and feel the pulse of the president of this country and his regime. We must always do things that will reduce the name calling or bad-mouthing of a particular regime”. “The customs know very well that waivers have been signed into law yet I have an aircraft on ground for over one month, an aircraft I pay over one million dollars of insurance whether it flies or  not. I pay over N490million with  a staff strength of over 3,000 people.”

“Our spare parts and engines will come into this country and customs will keep on keeping them and giving us all manner of reasons and bills to pay, even though the president of the country in his wisdom has signed into law these waivers. It does not depend on the whims and caprices of anyone any more. This is the law of the country and the customs should be made to obey the laws of this country or in the next coming week airlines may shut down. If not for the minister of aviation, last week all the airlines in the country would have shut down. Where does that leave this economy of this country? Air Peace in particular, an engine which should be cleared in one day has taken over one month to clear”. Onyema further said “In the neighbouring republic of Benin, it takes 48 hours to clear goods. The DG of WTO, Okonji Iweala talked about customs in this country facilitating business not killing business. The customs of Nigeria are not above the law.  The customs must be made to obey the laws of this country. They are killing aviation.” 

“This government wants to help aviation. The minister keeps on intervening. They should allow airlines that are struggling for forex at N490 to a dollar. We are struggling to play safe and at the same time, we decide to yank off an engine which will not serve the interest of aviation and we brought in another engine but the engine has been with the customs for over one month”, he revealed.