Luxury Surcharge on Private Jet, Yatch Owners and First Class Travellers

Proshare

Monday, April 13, 20158.54AM / By Obinna Chima, Thisday

The Federal Government, as part of measures to ensure a more sustainable revenue profile in the 2015 budget, yesterday disclosed that all local and foreign private jet owners in the country shall pay an annual surcharge of N3,200 per kilogramme based on the weight of each aircraft.

In the same vein, owning a yacht in the country now attracts an Import Adjustment Tax of 50 per cent, just as champagne, wines and spirits attract Import Adjustment Tax of 50 per cent.

Furthermore, in terms of international travel surcharge, the federal government noted that in view of the increasing foreign air travels, all first and business class foreign air travels tickets shall attract a flat rate of N15,000 per ticket as foreign travel surcharge, saying: “Implementation modalities are being worked out and this surcharge.”

The Federal Ministry of Finance  explained in a statement that the new set of measures were to tackle the huge revenue gap created by slump in crude oil prices as well as the massive decline in production.

It stressed the need to increase non-oil revenues such as surcharges on luxury items.

In addition, it stated that the Federal Inland Revenue Service (FIRS) had commenced the process of collection and had served assessment to private jet owners in Nigeria, adding that discussions are on-going with the private jet owners to ensure a successful implementation of the initiative.

Commenting on the review of pioneer status incentive, it stated: “Besides surcharges, the Federal Ministry of Finance in conjunction with FIRS, as a short-term measure, has conducted a review of the implementation of pioneer status incentive granted to some oil and gas companies, which could unlock some additional tax revenues in 2015.

“Consequently, 22 companies, which were granted pioneer status contrary to the provisions of the Industrial Development Act have been identified. NIPC, has written to restrict the pioneer status granted to these 22 companies to three years and FIRS has raised assessments on four of the companies that are liable to pay.

“Please, note that significant consideration has been given to prevailing social, political and economic factors in the country among others in proposing the above charges and levies. Accordingly, significant stakeholder consultation and communication are ongoing to ensure a successful implementation of the initiative,”

The federal government described the initiatives as part of key economic policies and initiatives of the  President Goodluck Jonathan administration in the run-up to May 29  to ensure that it achieves a reasonable level of progress before the handover.

“It is important to note that beyond raising additional revenues, the implementation of the proposals will also send a compelling message of the federal government of Nigeria’s commitment to addressing socio-economic inequalities in the country,” it added.

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