Aviation’s Tax Turbulence: Airlines Brace for January 2026 Lift-Off
The Federal Government just clipped the wings of a longstanding tax holiday, and Nigeria’s fragile carriers are rattling in their seats. Under the new Nigeria Tax Act 2025, President Bola Tinubu scrapped VAT and customs waivers on airline tickets, aircraft, engines, and spare parts, changes that become real money on 1 January 2026, Punch Newspapers reports.
What’s changing? A 7.5 % VAT will return on every ticket sold and on imported aircraft components, alongside customs duties that had been dormant for a decade. The law also ushers in the Nigeria Revenue Service (NRS) and a Joint Revenue Board to tidy up Nigeria’s maze of federal and state taxes.
Airlines are sounding the alarm. “The airlines would die within 48 hours,” warned Allen Onyema, Air Peace CEO and vice-chair of the Airline Operators of Nigeria, in Punch’s interview. Operators already battle forex scarcity and razor-thin margins; tacking VAT and duties onto every spare part feels like a fatal surcharge.
Government officials argue the pain is necessary to grow a tax-to-GDP ratio stuck around 10-11 % and to end a patchwork of exemptions that “benefit the few.” They’ve pushed the start date to 2026 “to ease the cost-of-living shock,” but, as one official bluntly told Punch, there will be “no going back.”
Why it matters: Nigeria’s carriers ferry more than 12 million passengers a year and support thousands of jobs. A price hike could ground routes, shrink capacity, and spill into tourism, logistics, and even government revenue targets the reforms were meant to boost. The reaction from tax pros? Expect a scramble for creative cost-management and perhaps a fresh lobbying push before the clock strikes 2026.
Around the Tax World
• Fuel levy on the back burner: A proposed 5 % tax on petrol should wait until “the naira appreciates or oil prices fall,” said committee chair Taiwo Oyedele on Arise TV via BusinessDay NG. He insists no pump-price shock is coming,yet.
• TIN ≠ locked bank account: The Joint Tax Board debunked viral claims that accounts without Tax Identification Numbers will be frozen on 1 January 2026, assuring Nigerians they’ll “continue to access their accounts,” according to Western Post.