The Presidential Fiscal Policy and Tax Reforms Committee has dismissed concerns that the new tax laws scheduled to take effect from January 1, next year, will negatively impact Nigeria’s aviation industry.
It insisted that the reforms are designed to reduce costs and ease long-standing operational pressures on airline operators.
In a statement posted on its official X handle on Tuesday, the Committee said the reforms are part of the solution to the challenges facing the aviation sector, not the cause.
“Contrary to the claim that the new tax laws will hurt the industry, the reform is part of the solution, not the source of the problem,” it said.
It acknowledged the genuine difficulties confronting airlines, particularly the burden of multiple taxes, levies, and regulatory charges, adding that engagements between the government and airline operators have been extensive and are still ongoing.
According to the Committee, airline operations are inherently low-margin, and concerns about the reintroduction of a 7.5 per cent Value Added Tax (VAT) on tickets have been exaggerated.
READ ALSO: Implementation Of New Tax Laws Will Commence On January 1 As Planned – Tinubu
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We recognise the genuine challenges facing Nigeria’s aviation industry, particularly the burden of multiple taxes, levies, and regulatory charges. The Presidential Fiscal Policy and Tax Reforms… pic.twitter.com/sVyOX7WB4y
— Fiscal Reforms Nigeria (@fiscalreformsng) December 29, 2025
“Airline operations are inherently low-margin. A 7.5 percent VAT on tickets, within a system where input VAT is fully recoverable, results in a significantly lower net impact than the headline rate suggests,” the Committee said.
It explained that even in a worst-case scenario where VAT is not claimable, the maximum impact would still be limited to 7.5 per cent.
“That is, a ₦125,000 ticket becomes not more than ₦134,375, and a ₦350,000 ticket not more than ₦376,250,” the statement added.
Under the new tax laws, the Committee said airlines will become fully VAT-neutral, as VAT paid on imported or locally procured assets, consumables and services will be fully claimable. It noted that where an airline has excess input VAT, the law mandates a refund within 30 days, supported by a fully funded tax refund account.
The Committee also stated that airlines will have the option to offset VAT credits against other tax liabilities, a measure it said is expected to reduce cost pressures and improve liquidity across the sector.
Clarifying further, the Committee stressed that existing import duty exemptions on commercial aircraft, engines and spare parts remain fully in place, adding that the reforms introduce no new import duty burden on airlines.
It also addressed concerns over the multiple levies and charges imposed on airlines and flight tickets, noting that such charges were not created by the new tax laws and should not be attributed to the reforms. The Committee said the government is working with airline operators and relevant agencies to achieve a lasting solution to the issue.
The clarification follows comments by the Chief Executive Officer of Air Peace, Allen Onyema, who had warned that the Nigeria Tax Act would reintroduce a 7.5 per cent VAT on aircraft imports, engines and spare parts that were initially suspended in 2020 during the COVID-19 crisis.
Onyema had argued that the move could push domestic economy fares from about ₦350,000 to over ₦1 million.
Other prominent voices, including former presidential candidates Peter Obi and Atiku Abubakar, have also called for a review of the new tax laws which is to take effect from January 1 2026
