Nigeria: Senate Asks Govt to Implement Zero Duty On Aircraft Importation, Spare Parts

25 November 2020

The Senate yesterday asked the federal government to fully implement the Executive Order on zero customs duty and zero Value Added Tax (VAT) on importation of commercial aircraft and aircraft spare parts.

This is just as the upper legislative chamber called on the Central Bank of Nigeria (CBN) to make foreign exchange easily accessible for the aviation sector by making the interest rate single digit for airline companies in order to reduce the cost of capital.

While calling on the federal government to eliminate multiple taxes, fees and charges, the Senate mandated its Committee on Banking, Insurance and other Financial Institutions to facilitate review of the National Insurance Commission (NAICOM) Act to grant the externalisation of insurance placements for domestic airlines.

It also urged the Ministry of Aviation to allocate more entries and frequencies to domestic airlines on international routes, as well as create a business-friendly environment for the air transport sector by fast tracking the clearance of Aircraft On Ground (AOG) spare parts.

These resolutions were sequel to the adoption of a motion entitled: 'The Need to Protect Nigerian Indigenous Airlines from Extinction', moved by former Governor of Kebbi State, Senator Adamu Aliero.

Moving the motion in the Senate, Aliero expressed concern that despite the significant contributions of the Airline Operators of Nigeria (AON) to the growth and development of the Nigerian economy, domestic airlines in the country are faced with multiplicity of challenges that are threatening their continuous existence.

According to the senator, "The non-implementation of the executive order on zero customs duty and zero VAT on importation of commercial aircrafts and aircraft spare parts; high cost of capital and lack of single digit interest rate for airlines; replacement of NCAA five percent Ticket Sales Charge (TSC) among others are pertinent issues that continue to plague the country's aviation industry.

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