The Airline Operators of Nigeria (AON) has raised serious concerns over the new tax reforms recently signed into law, warning that their implementation could lead to the collapse of domestic carriers in Nigeria.
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Mr. Allen Onyema, Vice-President of AON and Chairman/CEO of Air Peace, declared that Nigerian airlines would be forced to shut down within 48 hours if the tax laws come into effect as planned in January 2026.
President Bola Ahmed Tinubu had signed four new tax reform bills, which include the unification of revenue streams for government agencies — a move the aviation sector fears will undermine operational efficiency.
Speaking at the annual LAAC conference in Lagos, Onyema stressed that Nigerian airlines are already “taxed to death.” He pointed out that the reinstatement of duty waivers on imported aircraft and spare parts, which previously helped ease financial burdens on operators, is a grave mistake.
He said, “Bringing back customs duties on aircraft and spare parts, plus a 7.5% VAT on imported planes and even ticket fares, will worsen the already fragile financial position of Nigerian airlines. The airlines would die within 48 hours if this is implemented.”
Onyema welcomed the intervention of the Minister of Aviation, Festus Keyamo, who has raised concerns about the tax provisions.
Highlighting the slim profit margins in the airline industry, Onyema compared it to other sectors: “If you invest $100 million in aviation, you might expect 3-5% profit, whereas agriculture or importation might yield up to 70%. The added tax burden is crippling.”
He also criticized the 5% ticket fare charge paid to the Nigerian Civil Aviation Authority (NCAA), calling it a limiting factor on ticket pricing and airline revenue.
“Passengers pay this 5% charge, but airlines don’t get to keep it. It restricts our ability to price tickets effectively. This charge should be based on cost recovery principles, aligned with ICAO standards, not a legislated fee that burdens airlines,” Onyema stated.
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