Tax will help airlines, says tax chief

Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, and the Nigeria Civil Aviation Authority (NCAA) have countered claims by Air Peace Chairman and Chief Executive Officer, Allen Onyema, that the newly introduced tax laws would cripple Nigeria’s aviation industry, insisting that the reforms will instead reduce costs and support airline operations.

Oyedele said the new tax regime was designed to resolve long-standing fiscal challenges confronting airlines and should not be blamed for rising airfares or fears of an industry collapse.

His response followed Onyema’s warning during an interview on Arise Television on Sunday that domestic airlines could shut down within months if the tax reforms, scheduled to take effect from January 1, 2026, were implemented without review.

Onyema had attributed high ticket prices to multiple taxes and levies, claiming that a 7.5 per cent VAT on tickets could push economy fares as high as N1.7 million.

But in a statement posted on X yesterday, Oyedele acknowledged the genuine difficulties facing the aviation sector, saying that government engagements with airline operators were ongoing and aimed at easing their burden.

According to him, one of the biggest reliefs under the new tax laws is the removal of the 10 per cent withholding tax on aircraft leases, which had significantly increased operating costs for airlines.

He explained that the tax, previously non-recoverable, had been replaced with a rate to be determined by regulation, allowing for a possible full exemption or substantial reduction.

ALSO, the NCAA rejected claims that high domestic airfares, particularly in December, were driven by excessive taxes imposed on airlines. In a post on X yesterday, the Director of Public Affairs and Consumer Protection at NCAA, Michael Achimugu, said the narrative being circulated in the media did not align with findings from engagements with airline operators.

“While the NCAA does not regulate airfares, I have invited all the domestic airlines, bar none, and asked them about these taxes they keep talking about on TV, and they all admitted to not paying the volume of taxes being bandied around,” Achimugu said.

Achimugu questioned the consistency of the claims, noting that there was no increase in taxes or jet fuel prices during the period when fares peaked.