Nigeria aviation tax reform aims to ease airline costs, harmonise levies, and minimise ticket price impact from 2026
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has clarified that Nigeria’s new tax laws are intended to support, not hinder, the aviation industry, amid concerns raised by Air Peace CEO Allen Onyema.
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The statement was issued on Monday in response to comments made during a Sunday interview on Arise News.
Onyema had warned that the Nigeria Tax Act and related fiscal policies, due to take effect in January 2026, could reimpose a 7.5 per cent Value Added Tax on aircraft imports, engines, and spare parts, potentially driving domestic economy fares from N350,000 to as high as N1.7 million.
Oyedele, however, asserted that the reforms resolve long-standing tax challenges rather than create new burdens.
He highlighted the removal of the 10 per cent withholding tax on aircraft leases, full VAT neutrality on imported and locally procured assets, and the retention of existing import duty exemptions on commercial aircraft and components.
“The new tax laws provide a legal and policy framework to address long-standing challenges, reduce operating costs, and minimise the impact on passengers,” Oyedele said, emphasising that multiple levies currently affecting airlines are not a product of the reform.
He also noted that corporate income tax is set to fall from 30 to 25 per cent, while various profit-based levies, including the Tertiary Education Tax and other agency charges, will be harmonised into a single Development levy to simplify compliance.
Regarding ticket prices, Oyedele clarified that even a 7.5 per cent VAT, within a system where input VAT is fully recoverable, would have a limited effect. “A N350,000 ticket, at worst, would increase to N376,250,” he said, countering fears of dramatic fare hikes.
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The statement concluded by urging airline operators and stakeholders to engage with authorities constructively rather than spreading unsubstantiated claims, affirming that the reforms are part of a broader strategy to strengthen Nigeria’s aviation sector.
