….seeks practical tax policies to sustain fragile aviation industry
The Chairperson of the Aviation Sectoral Group of the Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN), Mrs. Nkechi Onyenso, has called for deeper stakeholder engagement on the Federal Government’s new tax reforms, warning that certain provisions could pose challenges for the aviation industry.
Speaking on the implications of the policy during a virtual meeting organized by Aviation and Allied Business Publication in partnership with the Federal Inland Revenue Service, FIRS, Mrs. Onyenso noted that while reforms are necessary and transparency in governance is welcome, loopholes in the framework may hinder effective implementation.
She stressed that the aviation sector, already battling weak passenger traffic and rising costs, could face additional strain if value-added tax (VAT) on airline tickets is fully introduced.
According to her, the move is likely to push up ticket prices and further dampen passenger demand, creating ripple effects for airlines whose revenues depend almost entirely on passenger numbers.
She acknowledged the government’s efforts to restructure tax obligations for small, medium, and large companies as well as adjustments to personal income tax, but warned that additional cost burdens such as the 5 percent fuel surcharge, will ultimately escalate operational expenses across the sector.
The aviation ICSAN chairperson also highlighted the broader economic pressures facing aviation, particularly the weakening of the naira against the dollar and the pound, currencies in which most aviation-related purchases are made.
She questioned whether taxing aircraft parts and services, largely procured in foreign exchange, would support the industry’s growth or worsen its challenges.
While reiterating that tax reforms are not inherently negative, Mrs. Onyenso insisted that their success depends on effective stakeholder consultations.
She urged the government to engage more closely with core aviation practitioners to ensure that policies are not only efficient and transparent but also practical enough to sustain operators in a highly fragile industry.
Reporting By Nosa Aituamen