Abuja — The aviation industry is raising strong concerns over Nigeria’s new tax laws, warning that the reintroduction of value-added tax (VAT) and customs duties on air travel and aircraft parts could cripple an already fragile sector.
The laws, signed recently by President Bola Tinubu, consolidate Nigeria’s fragmented tax statutes and create new revenue frameworks, including the Nigeria Revenue Service (NRS) and a Joint Revenue Board. Among other provisions, they reinstate VAT on airline tickets, aircraft, engines, and spare parts — exemptions first granted in 2018 to ease the burden on operators.
Airline Operators of Nigeria (AON) Vice President Allen Onyema cautioned that carriers could collapse within “48 hours” of the law’s enforcement in January 2026.
“If implemented, airlines would die. It has never been done anywhere before,” he said, urging the government to reconsider.
Government Defends VAT Reintroduction
The Federal Inland Revenue Service (FIRS) has defended the move, stressing that VAT is borne by passengers, not airlines.
“Airlines are only agents of collection. VAT is a levy on consumers,” said Nkechi Umegakwe, Assistant Director of Tax Policy and Advisory at FIRS, during a webinar on the Nigeria Tax Act 2025 and the aviation sector.
She argued the decision was based on the principle of VAT neutrality and ensures uniformity across sectors.
International Concerns
The International Air Transport Association (IATA) countered that taxing international air tickets contravenes global treaties. IATA Area Manager for West and Central Africa, Dr. Samson Fatokun, pointed to Nigeria’s obligations under the International Civil Aviation Organization (ICAO) and the ECOWAS Supplementary Act of December 2024, which bars taxation on air transport within the region from January 2026.
“Our President signed that agreement. Internal legislation should not contradict regional commitments,” he warned.
Risk of Double Taxation
Industry experts also raised concerns about overlapping levies. Aviation consultant Capt. Samuel Caulcrick said adding VAT on top of existing Ticket Sale Charges (TSC) and Cargo Sale Charges (CSC) amounts to double taxation.
Professor Adua Mustapha, Nigeria’s first professor of aviation law, echoed this, arguing that provisions of the Civil Aviation Act 2022 conflict with FIRS policies.
“The laws must be harmonized to prevent contradictions and protect the industry,” he said.
Industry Voices Call for Dialogue
Stakeholders including Overland Airways CEO Capt. Edward Boyo and ICSAN Aviation Sectoral Group Chairperson Mrs. Nkechi Onyeso stressed that aviation is too critical to Nigeria’s economy to be further burdened. They called for wider consultations before the new laws take effect.
“The country’s economy is going nowhere without stimulating its aviation industry,” Boyo said.
Analysts warn that the combination of high operating costs, currency depreciation, and new taxes could drive up airfares, reduce passenger traffic, and deepen economic challenges if no adjustments are made.
