September 12, (THEWILL) — Aviation stakeholders have expressed worries over the Federal Government’s plans to implement the new tax reforms, which are set to take effect in 2026.
At a virtual business webinar organised by Aviation and Allied Business Journal, in conjunction with the Nigeria Revenue Service (NRS), on Thursday, the Assistant Director at the Revenue Service, Mrs Nkechi Umegakwe, had informed that with the new tax reforms, aviation assets that are used in the aviation industry, such as commercial aircraft, engines, spare parts and airline transportation are no longer exempted from Value Added Tax (VAT) charged by the NRS (Formerly Federal Inland Revenue Service FIRS), with input of aircraft and spare parts claimable.
The new tax reform is expected to take effect starting next year.
The Assistant Director, in her presentation: “Implications of the New Tax Laws On Aviation”, said “Nigerian companies engaged in airline transportation business and other allied companies in the aviation sector are charged to tax like every other Nigerian company.”
According to her, VAT is a consumption tax on the supply of goods or services to be borne by the receiver, admitting that the airline sector consumes a lot. She also said that VAT paid on services can be recovered.
In his reaction, the International Air Transport Association (IATA) representative for West & Central Africa, Dr Samson Fatokun, stated that aviation is a global business and that there are already different types of levies, taxes and fees that are being paid by operators at both local and International levels.
He also said that they are treaties signed to govern the global aviation industry, adding that “Nigeria is a member of the International Civil Aviation Organisation (ICAO) and that the country is subject to regulations with regard to taxation made by ICAO.”
He, therefore, opined that international transportation of passengers cannot be taxed, advising that Nigeria needs to take into consideration the treaties signed.
He referred to the Economic Community of West African States (ECOWAS) supplementary tax document, stressing that ECOWAS is not introducing a supplementary tax on air passengers; rather, it has approved a regional strategy to significantly reduce air travel costs within its member states by eliminating non-compliant taxes and implementing a 25% reduction in airport passenger and security charges starting January 1, 2026.
“Our own regulation counters the supplementary Act of ECOWAS. We need to adjust to the recent adjustments made”, he said.
“For moveable assets, those moveable assets should not be taxed. You should not apply tax law to them. The Nigerian tax Authority needs to know international treaties that govern global aviation.”
Similarly, renowned aviator, Samuel Caulcrick, condemned the tax application, stating that Ticket Sales Charges (TSC) and Cargo Sales Charges (CSC) are the backbone of Aviation development in Nigeria.
“The major funding of revenue in Aviation is TSC and CSC. What the Act did was to tax it. This has choked the industry. It has choked freight businesses.”
Advising that such a session be repealed for easy compliance, he said, “TSC and CSC are 95 per cent revenue that drives the industry. It is double taxation.”
Also speaking at the webinar, Managing Director of Landover Company Limited, Capt Edward Boyo, called on the Federal Government to reconsider its taxation policies on the aviation sector, warning that excessive levies and charges risk stifling an industry that is central to Nigeria’s economic growth.
Lamenting that aviation is not treated as a priority sector in the nation’s economic framework, Capt Boyo argued that no meaningful economic development could take place without a thriving aviation industry, describing it as a catalyst for business and investment.
“Every major investment or development in Nigeria relies on air connectivity. Yet, our industry is being suffocated by a taxation regime that makes it difficult to grow or generate the revenues needed to support the economy”, he said.
Boyo stressed that while operators are compliant with tax obligations, the current system leaves the industry struggling to survive, pushing jobs and opportunities out of Nigeria and across West Africa.
He urged the government to provide special import corridors for aircraft parts, as none are manufactured locally, and to introduce incentives that would allow maintenance, repair, and overhaul (MRO) facilities and other support services to thrive within the country.
He also warned that without urgent policy reforms, airfares would inevitably rise, not because airlines wish to increase costs but because they must cover expenses in a highly safety-sensitive industry.
“We must not tax aviation out of existence. The sector should be given priority if Nigeria wants to unlock growth, create jobs, and drive economic development.”
The Airline Operator further reminded policymakers that aviation is not an end in itself but a driver of commerce, investment, and GDP growth.
He urged the Executive Chairman of the NRS and the Presidency to review the Tax Act 2025 with the aviation industry in mind, stressing that the sector deserves special consideration in the country’s economic planning.
Managing Director/Chief Executive Officer, Pathfinders International Limited, Nkechi Onyenso, wondered how such tax reforms could impact the industry, and their consequent effects on Aviation and allied companies.
She, however, advised the need for further engagement with stakeholders so as to have the input of all stakeholders concerned.
According to her, the paucity of foreign exchange, multiple taxation, and other levies had negative impacts on the aviation industry generally.
She, however, said that the new Tax Reforms Act had its own advantages, but insisted there was room for more engagement.
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
