New Tax Act: Fresh Airfare Hike Looms Over Levies On Aircraft, Tickets, Others

Airfares successful Nigeria are acceptable to emergence further from January 1, 2026, erstwhile the caller Tax Act, which imposes import duties and Value Added Tax (VAT) connected aircraft, craft parts and hose tickets, becomes operational.

The Act stipulates that section airlines volition statesman paying import duties and VAT connected commercialized craft imports, commercialized craft engines, spare parts, and aerial tickets.

Industry stakeholders pass that these caller levies volition summation airlines’ operational costs, a load apt to beryllium passed connected to passengers done higher summons prices.

The caller taxation betterment Act, published by the national authorities successful an authoritative gazette, among different provisions, besides allows taxpayers to settee levies arising from overseas currency transactions successful naira utilizing the prevailing speech complaint successful the authoritative overseas speech market.

LEADERSHIP Friday reports that the caller Tax Reforms Act would travel into effect successful 2026, and Airline Operators of Nigeria (AON) had warned it would illness the nation’s aviation sector.

AON vice president Dr Allen Onyema said that if implemented, the Tax Reform Act volition illness section hose businesses successful 48 hours.

According to him, Nigerian airlines are already overtaxed and adding further taxes volition origin the manufacture to collapse.

“I don’t cognize who enactment the clause successful the taxation betterment that airlines should commencement paying Customs work and 7.5 per cent Value Added Tax (VAT) connected imported aircraft, spare parts and adjacent airfares,” Onyema said.

However, speaking connected Thursday astatine a Business Webinar jointly organised by Aviation & Allied Business successful collaboration with the Federal Inland Revenue Service (FIRS), with the theme: ‘Nigeria Tax Act (2025) & The Aviation Industry: Aviation Sector Enlightenment Initiative,’ the national authorities declared that determination is nary going backmost connected the afloat implementation of the caller Tax Reforms Act from January 1, 2026

In her presentation, the adjunct manager of the Nigeria Revenue Service (formerly FIRS), Nkechi Umegakwe, said that the authorities had done each owed diligence earlier processing the caller taxation laws.

Umegakwe, the pb presenter astatine the event, insisted that hose operators, including different allied businesses successful the aviation sector, indispensable present wage VAT connected each of their services and operations.

Currently, airlines are exempt from paying import duties and VAT connected the importation of commercialized aircraft, commercialized craft engines, spare parts, and aerial tickets.

She insisted that each the supra are present liable to VAT from January 1, 2026.

According to her, the caller taxation reforms were geared towards accrued gross procreation for the national government, concern outgo simplification via VAT recovery, improved currency travel for businesses, and stronger compliance via integer invoicing and tracking.

Umegakwe expressed that the caller taxation reforms person harmonised assorted taxes to make a unified strategy that eliminates inconsistencies and drives ratio portion simplifying the existent taxation laws.

She said, “VAT is simply a depletion taxation connected goods and services to beryllium borne by the extremity users and not the suppliers. Once the caller taxation reforms go operational, you indispensable wage VAT connected immoderate you bring successful arsenic an hose – aircraft, engines, spare parts, and others.

“However, if the taxes are successful essence, the airlines tin inquire for a refund, which would beryllium done wrong 30 days of request. But, with the caller taxation reforms, airlines volition nary longer beryllium exempt from VAT payment.”

New taxes successful breach of planetary treaties

The country manager, West and Central Africa, IATA, Dr. Samson Fatokun, successful his publication arsenic a sheet member, criticised the authorities for inconsistencies.

In his presentation, Fatokun said that the airlines and different operators successful the assemblage were already overburdened with galore levies and charges, and helium wondered wherefore the authorities was bent connected adding to the existent challenges successful the sector.

Fatokun mentioned the outgo of a 5 per cent Ticket Sales Charge/Cargo Sales Charge (TSC/CSC) by the airlines arsenic 1 of the levies they were presently battling.

He maintained that the 5 per cent TSC/CSC inflated the terms of aerial tickets and frightened distant immoderate imaginable aerial passengers from the sector.

He recalled that President Bola Tinubu had, successful December 2024, arsenic the president of ECOWAS, signed a pact with different subordinate nations, which prohibited taxes connected aerial passengers and cargo.

The caller pact would instrumentality effect from January 1, 2026.

Apart from this, helium besides said that Nigeria, arsenic “a afloat member” of the International Civil Aviation Organisation (ICAO), signed a pact which prohibited outgo of VAT connected aerial transportation, reiterating that the aviation manufacture is outgo recovery, not gross generation.

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