Private jet owners and operators in Nigeria have been directed to pay $3000 or $4000 – depending on country of registration – as luxury tax after every flight within the country.
According to a memo issued on August 28 titled: ‘Order charging certain fees on operations in general aviation’ and signed by the Nigeria Civil Aviation Authority (NCAA) Director-General, Captain Fola Akinkuotu, private jets registered in the country will henceforth pay the sum of $3,000 (N480,000) for every departure, while foreign registered private jets would pay $4,000 (N640,000) per departure.
Such fees shall be paid in advance and prior to any departure.
NCAA says the directive is in compliance with the provisions of Section 30 (2) (q) & (s) of the Civil Aviation Act of 2006.
However, despite NCAA’s threat that “failure to comply shall result in denial of operations and or privileges”; private jets operators have complained that the levies are illegal and, as such, they will not pay.
Airline Operators of Nigeria argued that the new luxury tax amounts to double taxation and an illegality. They also described as the policy as ‘Draconian’.
NCAA has since filed a suit at the Federal High Court, Lagos, challenging the reluctance of foreign and locally-registered aircraft operators to pay the levies.
Nigeria is one of the world’s fastest growing private jet markets with politicians, church leaders and wealthy oil magnates increasingly opting for personal aircrafts.
Of the 139 private jets operating in Nigeria, 87 are registered overseas while 52 are registered locally.
Industry analysts say between March 2010 and March 2011, a few wealthy Nigerians spent at least $225 million acquiring private jets.
If the courts rule in favour of the NCAA, Nigeria will generate as much as $1.4m annually from the new luxury tax.
Private jet owners in the oil-rich country have been under scrutiny lately.
In May this year, Nigeria’s National Civil Aviation Policy (NCAP) 2013 sanctioned jet owners against permitting friends and business associates aboard private aircraft.
According to the NCAP 2013, companies with private jets are permitted to carry only employees or members of the Board of Directors while individuals with private jets can only carry members of their family, excluding friends and business associates.
In line with the policy, Nigeria’s Aviation Minister, Stella Oduah also directed that all foreign-registered private jets should not be allowed to stay in the country beyond 15 days. According to the directives, only foreign-registered jets on special mission would only be allowed to stay for only 60 days, following special approval from the her office.