There is a consensus among airline operators and aviation allied companies that the new tax reforms of the Federal Government is capable of doing incalculable damage to the aviation ecosystem.
Nigeria’s new tax law, enacted through the Finance Act 2023 and signed into law in June 2025, is expected to negatively impact its fragile aviation sector by reintroducing customs duties on imported aircraft and spare parts, and imposing Value Added Tax (VAT) on airfares, a measure previously waived.
This could cripple domestic airlines, many of which operate on razor-thin profit margins, by significantly increasing costs and potentially forcing them to pass these costs to passengers.
The airlines said the tax changes planned for implementation in January 2026 are contrary to the International Civil Aviation Organisation (ICAO) standards and may lead to fare increases, reduced passenger loads, job losses, and a general decline in the industry, according to operators and experts The new tax law experts said may lead to an increase in the cost of tickets, as airlines are already gearing towards that.
The implication is that many more people may shun air travel as the number of people who take to air travel is already shrinking. The carriers are expected to balance their action as a rise in air fares could lead to a further reduction in the number of people who travel by air.
The experts at a Webinar held yesterday called on President Bola Tinubu to cause a review of the tax reforms, noting that its implementation restores the resumption of Value Added Tax (VAT) on commercial aircraft, commercial aircraft engines, commercial engine spare parts, airline transportation tickets issued and sold by commercial airlines registered in Nigeria, as double taxation.
The founder and Managing Director of Landover Company Limited, Capt Edward Boyo, while appealing to the President to take a further look at the tax reform which he admitted has so many benefits but at disadvantage to the growth of the aviation industry in Nigeria urged him and the Director-General of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, to reconsider putting the sector on the priority sector list.
Boyo noted that with the present situation, it does not look like the government was ready to free the sector from the shackles of multiple taxation and levies, the two twin factors that have seriously plummeted the fortunes of the sector.
The International Air Transport Association (IATA) Area Manager for West and Central Africa, Dr. Samson Fatokun, lamented the different levies imposed on airlines and several other companies in the sector, stressing that the new tax law would do incalculable damage to the entire aviation value chain.
