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Customs restores VAT, multiple charges on imported aircraft, spare parts

The Nigerian Customs Service (NCS) allegedly reintroduced the collection of 7.5 percent VAT and other charges from operators three months after the imposition of zero VAT on commercial aircraft and spare parts.

Customs has opened a new window of charges, according to airline operators, which is substantially more expensive and difficult than the previous system.

Indeed, excluding aircraft from VAT, as is the case with general transportation in other parts of the world, has been a long-fought campaign that began in 2016. Despite the Ministry of Aviation’s efforts to defend the charges as part of its support for local carriers

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“As it is, you cannot be in need of a spare part, import it immediately and not pay VAT. No! Customs has introduced the Import Duty Exemption Certificate (IDEC) process that requires you to apply for exemption and get approval before importation.

“Unfortunately, it doesn’t work that way in aviation. It means an aircraft will have to be grounded for two to three weeks because of a spare part of less than $100. To avoid the loss, I have to order my spare parts, pay their VAT, and move on. That is how complicated the matter is in Nigeria. As an operator, everything is skewed against. It is just so unfortunate,” he said.

Aviation consultant and former Director General of the Nigeria Civil Aviation Authority (NCAA), Benedict Adeyileka, confirmed the development, describing the policy flip flop as antithetical to aviation growth and airlines survival.

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