Aviation stakeholders have urged the federal government to review the new tax regime taking effect in January 2026, saying it could bankrupt airlines and allied businesses if not aligned with industry standards.
Under the new rules, commercial aircraft, engines, spare parts, and airline transportation will no longer be exempt from Value Added Tax (VAT). The Federal Inland Revenue Service said Nigerian aviation companies will be taxed like any other business.
Industry leaders warned that this comes on top of high insurance premiums, costly aircraft maintenance abroad, and rising spare part prices due to exchange rates. Dr. Samson Fatokun, IATA’s representative for West and Central Africa, said Nigeria must respect international treaties and avoid double taxation. “International transportation of passengers cannot be taxed,” he said. He noted that ECOWAS is already working to reduce air travel costs in the region, while the new Nigerian tax would increase fares.
Amos Akpan, Managing Director of Flights and Logistics Solutions, said airlines already pay cargo and passenger sales taxes, charter taxes, passenger service charges, customs duties, state company taxes, and fuel levies. He explained that for a one-way ticket with a base fare of N148,000, taxes add about N55,000.
Dr. Allen Onyema, Vice-President of Airline Operators of Nigeria and CEO of Air Peace, warned at the Nigeria International Airshow that the tax could cripple airlines. Captain Ado Sanusi, CEO of Aero Contractors, said higher taxes would increase fares, reduce passenger numbers, and force airlines to cut staff. “Any tax regime that adds to the fare paid by passengers will automatically lead to 4 to 6 percent reduction in passenger demand,” he said.
Sanusi also cited ICAO rules that prohibit double taxation and said aviation revenue should be reinvested to grow the industry. He added that the new tax could reduce VAT collection, hurt NAMA and FAAN revenues, and negatively impact tourism.
There are reports that FIRS may meet with airlines to adjust the policy and prevent widespread bankruptcies in the sector.
