Nigeria’s airspace just got a tax turbulence warning
The Federal Government says its New Tax Reforms Act will start charging Value-Added Tax (VAT) on all airline services from 1 January 2026, ending years of exemptions. But the move is already facing heavy crosswinds from carriers and their global trade group.
The Big Picture
Aviation is still climbing out of its pandemic nosedive, so every naira counts. Slapping VAT on tickets, spare parts and even imported aircraft could push operating costs,and ticket prices,higher at a time when margins are paper-thin.
The Details
At a sector webinar, Assistant Director Nkechi Umegakwe told The Guardian Nigeria that “all the due diligence” had been done, and airlines must charge and remit VAT under the new law. The International Air Transport Association isn’t buying it. IATA blasted the plan in a statement carried by Vanguard, arguing it violates multiple treaties,including ECOWAS rules barring taxes on air passengers and cargo.
The backlash caps a frenetic week for Nigeria’s tax team. In a bid to sweet-talk consumers, the government simultaneously scrapped the 5 % telecom levy on voice and data, a move welcomed by industry players, ThisDay reports.
Why It Matters / What They’re Saying
Tax professionals warn the mixed signals could spook investors. “Airlines see multiple taxation, while telcos get relief,clarity is critical,” one analyst said during the webinar. IATA insists the VAT could make Nigeria “less competitive as a regional hub,” according to Vanguard. The government counters that VAT recovery and digital invoicing will improve airline cash flow once the dust settles.
Around the Tax World
• OECD sees CIT cuts cooling off. Corporate income tax rate reductions have “slowed significantly,” even as base-narrowing measures rise, the latest OECD survey reveals (International Tax Review).
• Big Tech writes a big Nigerian VAT cheque. Facebook, Amazon and Netflix have shelled out over ₦600 billion in VAT since Nigeria tweaked Section 10 of its VAT Act, the Federal Inland Revenue Service told TVC News.
• Trump tariffs head to the Supreme Court. A U.S. appeals court ruled most of the former president’s levies illegal; the White House wants the decision reversed, BBC News notes.
By the Numbers
Prime Number: ₦600 billion, the VAT haul Nigeria collected from foreign digital platforms in less than two years (TVC News).