‘Why tax waiver on air­plane, parts is big deal for local car­ri­ers’

Daily Trust - - BUSINESS - From Ab­dul­la­teef Aliyu, La­gos

Re­cent de­ci­sion by the Fed­eral Gov­ern­ment to grant waiver on im­por­ta­tion of com­mer­cial planes and spare parts for in­dige­nous air­lines is ex­pected to save air­lines huge bil­lions of naira an­nu­ally.

This, ac­cord­ing to ex­perts, would re­lieve in­dige­nous car­rier elim­i­nate the bur­den of im­port duty and Value Added Tax (VAT) pay­ment amidst the un­end­ing grum­bling over mul­ti­ple charges.

Local air­lines have con­sis­tently com­plained over what they called in­hibitive op­er­at­ing en­vi­ron­ment with mul­ti­ple charges by agen­cies, scarcity and high cost of fuel known as Jet A1, among oth­ers. How­ever, the tax waiver would go a long way in re­duc­ing the bur­den of local car­ri­ers, ac­cord­ing to oper­a­tors.

It would be re­called that the Nige­ria Cus­toms Ser­vice (NCS) in a let­ter dated 20th June, 2016 in­formed air­line oper­a­tors that the pol­icy on zero im­port duty for im­por­ta­tion of com­mer­cial air­craft and their parts is still in place.

The NCS’s com­mu­ni­ca­tion to the air­line oper­a­tors 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 itss 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.”

The an­nounce­ment was re­ceived by in­dige­nous air­lines with eu­pho­ria as vir­tu­ally all the car­ri­ers have one spare part or the other to im­port like tyres, ro­taries, engine oil, among oth­ers.

The im­pli­ca­tion of the new pol­icy is that air­lines would save about 10 per cent paid as im­port duty and VAT on these spare parts.

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