Finance

Private Jet Owners Refused to Pay N30bn Tax; Drags FG to Court

These jet owners, including business moguls and leading commercial banks, have dragged the federal government to court to seek judicial review to ascertain if they are liable by law to pay the import duty imposed on them.

Published

2 months ago

November 30, 2022

Investors King

A number of wealthy Nigerians who own private jets have refused to pay more than N30 billion in import duty tax, the Nigeria Customs Service.

The owners, including business moguls and leading commercial banks, have dragged the federal government to court to seek judicial review to ascertain if they are liable by law to pay the import duty imposed on them.

Investors King could recall that the Federal Government had approved the decision of the Nigeria Customs Service (NCS) to ground 91 private jets belonging to some wealthy Nigerians over their alleged refusal to pay import duties running to over N30 billion.

The Nigeria Customs Service claimed that the owners are liable to import duties since the private jets are foreign-registered.

Subsequently, acting upon the presidential approval, the Customs Service directed the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Airspace Management Agency (NAMA), to ground the affected private jets with immediate effect.

Meanwhile, owners of the private jets have filed a court case to stop the import duty imposed on them by NCS.

The owners who have approached the Federal High Court in Abuja are seeking the court to determine, among other things, if they were liable to pay import duty.

Investors King learnt that the owners filed their cases using their trustee companies to hide their identities.

Some of these trustee companies most of which are foreign firms include, Aircraft Trust and Financing Corp Trustee, UAML Corp, Bank of Utah Trustee, Masterjet AVIACAO Executive SA, Empire Aviation Group, and Osa Aviation Limited and Cloud Services Limited.

According to the court document, at least 17 applicants have filed cases against the import duty.

On the respondent list, include the Nigeria Customs Service (NCS) and the Nigerian Civil Aviation Authority (NCAA).

While speaking on the development, the President, Association of Private Aircraft Owners, Mr. Alex Nwuba noted that the government needs to show a higher degree of transparency in the process of registering private jets.

He concluded that while the government is aiming to generate revenue from all means possible, the import duty imposed on the private jet owners might be too much.

“If you buy a private jet for $80m, you may need to pay a duty of over $10m; that may be high to some people,” he said.

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Finance

An Uptick in The FAAC Payout

Published

10 hours ago

January 28, 2023

Samed Olukoya

The latest gross monthly distribution for the Federation Account Allocation Committee (FAAC) to the three tiers of government and public agencies amounted to N990bn in January (from December revenue).

This was an increase of 9.8% or N88.1bn from the previous payout (N902bn recorded in November ’22) and marks the highest FAAC payout recorded in 2022. The increase can be partly attributed to improved non-oil revenue collection. Based on data from the local media, Companies’ Income Tax (CIT), VAT, oil and gas royalties and export duties recorded increases while import duties declined significantly.

The FGN received a total of N375.3bn while state governments received N299.6bn. Furthermore, oil-producing states received an additional N93.5bn representing the 13% derivation for mineral revenue. The headline figure consisted of N707.8bn gross statutory distribution.

This is a month on month increase of 3.9%. Additionally, N233.3bn came into the VAT pool, and N24.3bn from Electronic Money Transfer Levy (EMTL). The total deduction for cost of collection was N31.5bn.

Furthermore, the committee disclosed that the Excess Crude Account (ECA) remained unchanged from the previous month at USD473.7m. Despite elevated oil prices which were above the FGN’s 2022 oil price benchmark (USD73/barrel), the ECA has remained relatively low. In 2014, the ECA was as high as USD4.1bn.

It is worth highlighting that the NNPC made zero contributions to FAAC in 2022, largely due to high fuel subsidy costs. According to the NNPC, the total cumulative subsidy deductions stood at N2.04trn in July ’22 vs N1.5trn spent in 2021. The shortfall in oil revenue was partly offset by relatively higher non-oil revenue collection.

The net FAAC distribution to states and local governments hit the money market last week, as an inflow of N650bn was recorded, which supported market liquidity. We note that the FGN’s share of the FAAC allocation (c.N375bn) is transferred directly to the treasury single account.

To avoid overreliance on FAAC distributions and ensure more resilience against future shocks, state governments need to diversify their revenue base. Unemployment and underemployment continue to cost states billions of naira in forgone revenue through payment of income taxes (PAYE). To boost IGR, states should consider providing incentives for the private sector to support economic activities within their respective states.

Banking Sector

CBN: New National Domestic Card Will Improve E-payment, Foreign Exchange

Published

11 hours ago

January 28, 2023

Blessing Akorowosi

The newly inaugurated Nigerian National Domestic Card Scheme is aimed at enhancing electronic payment and foreign exchange, the Central Bank of Nigeria (CBN) says.

The official launch of the National Domestic Card was done virtually on Thursday, Investors King reports.

Speaking on the benefits of the new domestic card, the CBN Governor, Godwin Emefiele said it will lessen operating costs, charges and strengthen foreign exchange in Nigeria.

Emefiele stated that the use of the new domestic card is with immediate effect and all local transactions will be done through the card.

His words, “Ladies and gentlemen, at this time when foreign exchange challenges persist globally, it is important that I say that we have come up with this card to ensure that all online transactions will now be effective and immediately begin to go on the Nigerian National Domestic Card system.

“All domestic transactions that are going to be conducted in Nigeria will have to be through the Nigerian domestic cards.”

He pointed out that the apex bank will collaborate with the Nigeria Inter-Bank Settlement System Plc and commercial banks to ensure that only international transactions are accompanied with charges as when done with Visa card or Master Card.

The CBN governor expressed concern over the large number of payments still carried out without cards despite the fact that card payment had been introduced in Nigeria a long time ago.

He highlighted some of the reasons as expensive card services which include charges due to foreign exchange requirements of the international card system and unlocalised cards in existence.

Emefiele averred that the new national domestic card scheme seeks to address these challenges and encourage more card transactions, adding that the card would be accessible to all citizens regardless of locality.

Loans

FG Releases List of 94 Approved Online Loan Applications

Published

2 days ago

January 26, 2023

Blessing Akorowosi

Federal Competition and Consumer Protection Commission, FCCPC under the Federal Ministry of Trade and Investment has assented to 94 online loan applications for operation in Nigeria.

Investors King reports that out of the 94 approved digital money lender companies in Nigeria, 49 companies were fully approved while the other 45 firms were issued conditional approval.

Google, in November 2022 threatened in its new policy to delete all unlicensed Nigerian loan apps from the Google play store by January 31, 2023, Investors King recalls.

Every loan app is required to tender their documents from the FCCPC which is saddled with the responsibility of safeguarding the interest and ensuring the well-being of consumers.

According to the FCCPC update on the registration of online loan applications which is still ongoing, the licensing is necessary to curb the menace of extortion by loan sharks.

The Commission explained that the regulatory framework and guidelines for the digital lenders companies were earmarked in partnership with the Joint Task Force (JTF) aimed at ensuring fairness and advantageous alternative lending opportunities for the citizens.

In the Commission’s laid down guidelines, the lending company will register with the FCCPC and fill two forms– Form DLG 001 and Form DLG 002.

“Form DLG OO1 is the registration form that requires the applicant company to provide identification and operational information to the FCCPC.

“The Form DLG 002 contains declarations relating to: Legitimacy; Compliance with applicable regulatory requirements; Lawful source of funds and conformity with anti-money laundering; and Data protection laws,” it stated.

As outlined by the Federal Competition and Consumer Protection Commission (FCCPC), the listed companies below have gotten the full approval of the commission—