The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, alongside the Nigeria Civil Aviation Authority (NCAA), has faulted claims by Air Peace Chairman, Allen Onyema, that newly introduced tax laws would cripple Nigeria’s aviation industry, insisting the reforms are designed to reduce costs and support airlines.
Oyedele said the new tax regime should not be blamed for rising airfares or fears of an industry collapse, stressing that it addresses long-standing fiscal challenges faced by airline operators.
He was responding to Onyema’s warning on Arise Television that domestic airlines could shut down within months if the tax reforms, scheduled to take effect from January 1, 2026, are implemented without review.
Onyema had linked high ticket prices to multiple taxes and levies, claiming that a 7.5 per cent VAT on tickets could push economy fares to as high as N1.7 million.
However, Oyedele said government engagements with airlines are ongoing and aimed at easing operational burdens rather than worsening them.
According to Oyedele, a major relief under the new tax laws is the removal of the 10 per cent withholding tax on aircraft leases, which had significantly increased operating costs.
He explained that the previously non-recoverable tax has been replaced with a rate to be set by regulation, allowing for possible exemption or substantial reduction.
The NCAA also rejected claims that excessive taxes were responsible for high domestic airfares, especially during the December peak period.
Its Director of Public Affairs and Consumer Protection, Michael Achimugu, said consultations with domestic airlines showed they were not paying the level of taxes being reported, adding that there was no increase in taxes or jet fuel prices when fares surged.