The new tax laws signed by President Bola Tinubu and set to take effect in January 2026 have sparked outrage across Nigeria’s aviation industry, with operators warning that the sector could collapse under the weight of fresh levies.
The laws—comprising the Nigeria Tax Bill (Ease of Doing Business), the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill—seek to harmonize tax frameworks and create a stronger national revenue agency.
For airlines, however, the most contentious provisions are the reinstatement of Value Added Tax (VAT) on tickets, aircraft, engines, and spare parts, alongside customs duties on imported aircraft and components. These exemptions, granted in 2018 to ease industry pressure, have now been repealed.
Vice President of the Airline Operators of Nigeria (AON), Allen Onyema, warned that the new tax regime could ground airlines “within 48 hours” of enforcement. “If this is implemented from January, airlines would die. It has never been done anywhere before,” he said.
Defending the policy, the Federal Inland Revenue Service (FIRS) argued that VAT is borne by passengers, not airlines, describing the move as a “principle of VAT neutrality.”
But the International Air Transport Association (IATA) countered that the laws breach international treaties and ECOWAS’ Supplementary Act of December 2024, which prohibits VAT on air transport within member states from January 2026.
Aviation experts also flagged the risk of double taxation, noting that airlines already pay Ticket Sale Charge (TSC) and Cargo Sale Charge (CSC). “Aviation should not pay VAT as long as the TSC and CSC are still there,” consultant Capt. Samuel Caulcrick argued.
Others, including Prof. Adua Mustapha, Nigeria’s first professor of aviation law, and Mrs. Nkechi Onyeso of ICSAN’s aviation group, called for urgent stakeholder engagement, warning that the industry is too fragile to absorb new costs.
Capt. Edward Boyo, CEO of Overland Airways, lamented: “Aviation appears not to be considered a priority sector. Yet, without a viable aviation industry, the economy will go nowhere.”
