Airline operators get zero duty, VAT exemption on aircraft spares

Airline owners in Nigeria have got a major reprieve that could assist mitigate their huge overhead as the Federal Government has acceded to their request to grant zero per cent payment on Duty and VAT on all commercial aircraft spares imported into the country.

The clarification on the Zero Duty and Value Added Tax (VAT) was contained in a letter signed by the Nigeria Customs Service and made available to Airline Operators of Nigeria (AON). Chairman of the AON, Captian Nogie Meggison who made available the Customs letter to aviation correspondents said operators were “full of thanks to the government for graciously identifying with the pains of the Nigerian travelling public by extending its support for commercial airlines in the country and re-affirming the Zero Duty and VAT payment on the importation of commercial airplanes and its spare parts as a way of alleviating the cost burden and ensuring safe flight operations.”
Part of the Customs letter read: “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 &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.”

“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.”
Airline operators had consistently urged the government to jettison it’s stance of charging VAT and duty on aircraft spares.
Meggison noted that the unprecedented move was a welcome development and a strong testament to the commitment President Muhammadu Buhari led administration for feeling the pulse of the masses and making good on his promise to work assiduously to ensure that aviation doesn’t go out of the reach of the common man by giving it the attention it rightly deserves.

“AON would like to thank the Federal Government of Nigeria for giving a listening ear to our persistent calls for the removal of Duty and VAT on the importation of commercial aircraft and its parts as is done in other parts of the world,” said Meggision. “This is a welcome development and we commend the government for showing maturity and understanding of the critical role that aviation plays in driving the Nigerian economy thereby supporting Nigerian airlines, promoting safety and sustaining jobs,” Meggison added. The government gesture it was learnt was extended specifically to commercial aircraft operators and not private jet operators who are required to pay for luxury taxes.