KEY POINTS
- Airline group says tax changes threaten survival.
- New levies to apply from January 1, 2026.
- Industry leaders further urge for policy consistency.
Nigeria’s domestic airlines have warned that newly signed tax reforms could shut down the industry within two days of implementation, deepening a crisis in a sector already weighed down by rising costs and weak demand.
The Airline Operators of Nigeria, representing domestic carriers, says provisions in the law — including customs duties on imported aircraft and spare parts, plus taxes on ticket fares — would push marginally profitable businesses into immediate insolvency.
The warning comes after President Bola Tinubu signed four bills into law on June 26: the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and Joint Revenue Board Act, all due to take effect on January 1, 2026.
Tax reform threatens Nigerian airlines
Allen Onyema, vice chairman of AON and chairman of Air Peace, told aviation stakeholders at the League of Airport and Aviation Correspondents’ annual conference that current margins in the industry hover between three and five percent — far below the 70 percent possible in other sectors such as agriculture or imports.
“We are taxed to death,” Onyema said, pointing to an existing five percent ticket sales levy paid to the NCAA that already eats into profits. “If these new reforms take effect, airlines will die within 48 hours.”
Industry seeks government intervention
Onyema said the Aviation Minister, Festus Keyamo, had also taken up the matter, stressing that global best practice — as recommended by the International Civil Aviation Organisation — allows only cost-recovery charges, not punitive taxes.
The new tax regime would reverse existing exemptions and reintroduce import duties for aircraft and parts, further raising operating costs in a dollar-dependent industry.
Call for policy stability
Bismarck Rewane, chief executive of Financial Derivatives Company, also urged the government to maintain policy stability to rebuild investor trust and attract global aviation capital.
Furthermore with the air transport sector contracting 0.81 percent in Q1 2025 the sixth straight quarterly decline Rewane warned that without consistent regulation and targeted support, Nigeria risks losing more ground in regional aviation.
