A plan by the Federal Government to go after wealthy tax defaulters is faced with some hurdles in the aviation sector as most private jets in the country could hardly be traced to individuals using them.
An investigation revealed that the multi-million dollar worth of super luxury gadgets, about 200 of them in Nigeria, were registered under shell companies while the identities of the real owners are left to speculation.
A handful of rich Nigerians, including religious leaders, have been said to own private jets under such conditions. Experts are, however, worried that the practice, besides aiding tax evasion, poses security risk and violates the guiding Nigerian Civil Aviation Regulations (NCARs).
It was discovered that a total of 409 scheduled and non-scheduled aircraft are currently in the records of regulatory agencies. About half of the aircraft are privately owned.
Except those owned by the presidency (presidential fleet), key government agencies like the police, customs and National Emergency Management Agency (NEMA), state governments like Rivers and multinationals companies, others were registered under non-trading companies.
Another exception is a popular pentecostal church in Ota, Ogun State that has since upgraded to the status of an airline (Dominion Air) with its own Air Operating Certificate (AOC). Another pentecostal church, with its international camp on Lagos-Ibadan Expressway has enlisted its private jet under Dominion Air. The rest are allegedly owned by unknown Nigerians who have registered over 120 overseas and the rest in Nigeria under company names.
It was learnt that most of the owners get lawyers that are versed in international and company laws to register shell companies on their behalf in offshore tax havens in Europe and Middle East where little or no tax is paid.
A reliable source at the Nigerian Civil Aviation Authority (NCAA) said while it is easy to count how many private jets are in operation in the country, “it would be very difficult for anyone to know who owns what.”
Reason: “Hardly do they register in their own names, but in the name of a third party, that is if they register here at all. Most of them are registered in places like South Africa and Europe. Yes, it is funny to say owners of our private jets are unknown, but that is the situation around here. It is not for NCAA to start asking for names,” he said on condition of anonymity.
A chief pilot formally attached to a wealthy Nigerian noted that it was more convenient to have the aircraft registered in the country of manufacture or overseas because insurance premium is cheaper compared to “high-risk Nigerian environment” coupled with high second-hand value overseas.
“The other reason that we cannot overlook is the tax, considering that taxes on these aircraft in relation to their worth are equally very huge. Why would the rich not want to bypass the system if it allows it?”
Popular brands and models include the Bombardier Challenger 604 and 605; Global Express, Global 6000; Hawker Siddley 125 and 900; Gulfstream 450, 550 and 650; Embraer Legacy, Fenum and Citation with the cost ranging from $25 million (about N7.65 billion) to $40 million ( about N12.24 billion).
The Gulfstream G650, said to be state-of-the art, costs $65 million (about N19.9 billion). It’s the biggest, fastest, and overall best private jet money can buy. Many wealthy Nigerians own this aircraft type.
According to reports, Federal Government agencies currently get about N12 billion yearly from taxes, charges, over-flier, landing and parking of the jets. At full compliance with mandatory taxes, revenue from private jets is expected to be higher.
This may not happen until there is a diligent forensic audit and plugging of loopholes, Capt. Dung Rwang Pam said.Pam, who is the Chairman of Nigeria Aviation Safety Initiative (NASI), said the loophole the jet owners exploit is when they register the private jets in Nigeria on part G of a Nigerian AOC holder. Part G is a provision under the Nigerian civil aviation regulations.
He said: “Past experiences have shown that some of them surreptitiously engage in illegal commercial (charter) air transport without the knowledge of the NCAA. “The possible solution is increased vigilance on the part of the NCAA, and specifically the Directorate of General Aviation (DGA), to help curb the blatant subversion of our extant laws and regulations.
“Secondly, plugging the loopholes that have been uncovered in our extant regulations and system of jurisprudence will make it difficult for such unethical behaviour to begin in the first place or continue unabated,” Pam said.
The Secretary of the Aviation Safety Round Table Initiative (ASRTI), Group Captain John Ojikutu (rtd) described the difficulty in identifying the owners of the jets as worrisome with regard to national security.
To Ojikutu, the NCAA and Nigerian Airspace Management Agency (NAMA) should do a thorough audit on all privately owned aircraft that were registered and those that are still carrying foreign registrations.
“At the time the Federal Inland Revenue Service (FIRS) was running after the jets, most of them were brought in with NCAA short-stay clearance and usually one-point stop. Somehow they overstay their clearance and begin to fly on a hire- and-reward basis.
“These categories of foreign registered aircraft doing hire and reward, apart from avoiding paying the statutory custom duties, must also be violating some of the provisions of the NCAR economic regulations and that is really where our regulators should be looking,” Ojikutu said.