FG imposes a luxury tax on private jet owners

 

The Federal Government has imposed a luxury tax on private jet owners and operators in the country.

As a result, the Nigeria Civil Aviation Authority has directed the owners and operators of private jets to pay the sum of $4,000 for every flight departure within the country.

According to a memo to all private jet operators and obtained by our correspondents, the NCAA ordered that Nigerian-registered private jets would henceforth pay the sum of $3,000 for every departure, while foreign registered private jets would pay $4,000 per departure.

The memo, dated August 28, 2013, and signed by the Director-General, NCAA, Captain Fola Akinkuotu, was titled, 'Order charging certain fees on operations in general aviation.'

The memo, with reference number: NCAA/DG/OR/GA/VOL.11/2013/06, reads, "In compliance with the provisions of Section 30 (2) (q) & (s) of the Civil Aviation Act of 2006, the Authority hereby orders: All foreign registered aircraft engaging in non-scheduled operations shall forthwith pay $4,000 as fees under the provisions of the law set out above for every departure, except round trips without changes in passenger manifest, or return ferry. Such fees shall be paid in advance and prior to departure.

"All Nigerian-registered aircraft engaging in non-scheduled operations shall forthwith pay $3,000 as fees under the provisions of the law set out above for every departure, except round trips without changes in passenger manifest, or return ferry. Such fees shall be paid in advance and prior to any departure.

"This order shall be effective and in force immediately upon the date of issuance. Failure to comply shall result in denial of operations and or privileges."

The memo is, however, generating controversy in the aviation sector, with some operators arguing that the levies are illegal and, as such, they will not pay.

But the NCAA has filed a suit at the Federal High Court, Lagos, challenging the reluctance of foreign and locally-registered aircraft operators to pay the levies.

In an originating summons dated September 23, 2013, the plaintiff (NCAA) is praying the court to determine whether by true construction of sections 30 (2) (q) and 30 (5) of the Civil Aviation Act, 2006, it is empowered to impose fees on all foreign and Nigerian registered aircraft engaged in non-scheduled operations.

The agency deposed that the payment of the said fees was to take effect from the date of the issuance of the order.

The affected airlines and aircraft operators under the aegis of the Airline Operators of Nigeria have described as draconian the policy, which they say amounts to double taxation and an illegality.

If the move by the NCAA becomes successful, it will affect pastors, business moguls and other private jets owners in the country, who will be expected to cough out about $1.4m annually as luxury tax.