Airline operators in Nigeria’s aviation industry, backed by international and local stakeholders, have rejected the Federal Government’s plan to impose additional taxes on scheduled airlines under the Nigeria Tax Act 2025, warning that the move could devastate the sector and worsen the plight of passengers already facing record-high ticket prices.

The operators made their objections known during a Business Webinar held on Thursday with the theme “Nigeria Tax Act (2025) and the Aviation Industry.” The session, monitored by our correspondent, featured strong opposition led by Dr Samson Fatokun, Area Manager for West and Central Africa at the International Air Transport Association.

Stakeholders argued that the aviation sector is already overburdened by excessive charges and levies. Domestic operators currently pay Passenger Service Charge, Ticket Sales Tax, Cargo Sales Charge, five per cent on all aviation contracts, and a $20 security levy.

Recently, the Advance Passenger Information System introduced charges of $11.50 per passenger on each flight leg. Passengers have borne the brunt of these costs, with domestic airfare doubling in the past year, forcing many Nigerians to abandon air travel for road transport.

Capt. Edward Boyo, founder and Managing Director of Landover Company Limited, described the reforms as “a disadvantage to the growth of Nigeria’s aviation sector.” He appealed to President Bola Tinubu and Federal Inland Revenue Service Chairman, Dr Zacch Adedeji, to review the charges.

“The country’s economy cannot grow without aviation. Jobs cannot be created if nothing is done to improve the fortunes of this industry. If these tax burdens persist, operators may have no choice but to raise fares further,” Boyo warned.

Representing the government, the Assistant Director and Tax Policy Adviser at the FIRS, Mrs Nkechi Umegakwe, insisted that the new tax laws followed due diligence and were designed to strengthen compliance, boost revenue, and align Nigeria’s tax system with global standards.

She explained that from January 1, 2026, airlines would be required to pay Value Added Tax on their services, including the importation of commercial aircraft, engines, spare parts, and air tickets. “VAT is a consumption tax borne by end users, not suppliers. Once the reforms become operational, whatever airlines bring in—aircraft, engines, spare parts—will be liable to VAT,” she stated.

Umegakwe stressed that the reforms are part of a comprehensive fiscal strategy aimed at enhancing Nigeria’s ease of doing business while raising much-needed government revenue.

But Dr Fatokun of IATA countered that the policy directly contradicts international treaties and agreements Nigeria has signed. He reminded the government that under International Civil Aviation Organisation rules, to which Nigeria is a signatory, international air transportation of passengers is explicitly exempt from taxation.

He also cited a Supplementary Act of the Economic Community of West African States signed on December 14, 2004, which prohibits taxation on the transportation of passengers and goods by air within member states. “Nigeria cannot sign international and regional treaties only to breach them through domestic legislation. That would portray us as unserious in the comity of nations,” Fatokun warned.

He emphasised that any new tax regime must respect Nigeria’s treaty obligations, noting that even past attempts to impose VAT on domestic air passenger services generated disputes.

Industry experts warn that the aviation sector is approaching a breaking point. The rising cost of operations, driven by multiple levies, foreign exchange volatility, and high fuel costs, has already led to ticket price hikes, reducing demand for air travel.

Capt. Samuel Caulcrick, an economist and former Rector of the Nigerian College of Aviation Technology, appealed for the exclusion of the sector from additional tax burdens. “The airlines are being choked. Without relief, operators will collapse under these costs,” he said.

Stakeholders stressed that the aviation industry plays a pivotal role in economic growth, connectivity, and job creation. They argued that overtaxing the sector will undermine its ability to support trade, investment, and regional integration.

Boyo urged the Federal Government to classify aviation as a “priority sector” in its tax framework. “The government must get acquainted with international rules binding our aviation industry. If properly supported, aviation can drive economic expansion and employment opportunities,” he said.

For ordinary Nigerians, the implications are clear: more expensive air tickets. Already, airfares have doubled within a year, with operators blaming operational costs and excessive taxation. Should VAT be imposed on imported aircraft, parts, and tickets, airlines warn that the costs will be passed down to passengers.

Industry analysts fear this could reverse Nigeria’s modest gains in air connectivity, especially at a time when regional integration under the African Continental Free Trade Area (AfCFTA) depends heavily on efficient air transport.

Across the board, operators, economists, and international regulators are appealing to President Tinubu to intervene before January 2026. They argue that while tax reform is important for government revenue, aviation should not be treated the same as other industries given its international legal frameworks and critical role in economic development.

As the countdown to the implementation date begins, the industry remains divided between a government pushing for fiscal reforms and operators warning of an existential threat. The coming months will determine whether Nigeria opts to renegotiate its aviation tax framework in line with treaty commitments or risk worsening a sector already in turbulence. (PUNCH)

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