New Tax Rules Threaten Future Of Nigerian Airlines

Nigeria’s domestic airline industry is facing a fresh crisis after the federal government approved new tax measures that could push operators to the brink.

The policy, signed into law by President Bola Tinubu, introduces customs duties on imported aircraft and spare parts, adds a 7.5 percent value-added tax on imported planes, and applies VAT to passenger tickets.

The changes are coming at a time when airlines are already struggling with high operating costs. Industry figures warn that the sector could collapse if the new tax system is enforced, as operators will be unable to manage the extra financial burden. Domestic carriers have long complained of excessive taxes and charges, which already make tickets expensive for passengers.

Passengers flying out of Nigeria currently pay some of the highest fees in Africa. A recent report by the African Airlines Association shows that Nigerian travelers pay about 180 dollars in taxes and fees for a single ticket, while the average across the continent is 68 dollars. Only Gabon and Sierra Leone impose higher charges. The high costs discourage many people from traveling by air, leading to lower passenger numbers and reduced revenue for airlines.

The new policy could trigger a chain reaction across the aviation sector. Airlines may be forced to cancel flights, cut routes, and lay off staff to survive. Experts warn that such actions could damage the economy, limit business travel, and affect tourism. The risk of job losses extends beyond pilots and cabin crew to engineers, ground handlers, and others who work indirectly with the airlines.

Some stakeholders are calling for urgent discussions with the government to review the taxes before they take effect. They believe a more balanced policy could protect the industry, keep ticket prices affordable, and help airlines remain competitive against foreign carriers.

While the government has recently cleared almost 900 million dollars in outstanding debts to foreign airlines caused by foreign exchange shortages, operators insist that the survival of local carriers depends on reducing the cost of doing business in the aviation sector. Many believe that without immediate changes, the industry could face its worst crisis in years.