New tax regime may push airfares beyond N1m, threaten airline survival – Onyema

The Chairman and Chief Executive Officer of Air Peace, Allen Onyema, has warned that Nigeria’s domestic aviation sector is under severe financial strain, saying that the implementation of the new tax laws may push airfares beyond N1 million and force airlines to suspend operations.

Speaking in an interview with ARISE NEWS on Sunday, Onyema said urgent intervention is required to avert a possible collapse of the industry.

“Nigerian airlines are heavily overburdened by taxes, levies and all manner of charges. Take a ticket of about N350,000—what actually comes to the airline is roughly N81,000. Yet people talk as if airlines are making huge profits. That is not true,” he said.

He criticised what he described as multiple and overlapping charges imposed on operators, citing the mandatory five per cent deduction on every ticket by the Nigerian Civil Aviation Authority (NCAA).

Onyema contrasted the current policy direction with the 2020 tax law, which exempted imported aircraft, spare parts and engines from customs duties and VAT, and also removed VAT on ticket fares, providing significant relief to airline operators.

However, he said the new laws have reversed those incentives, reintroducing a 7.5 per cent VAT on aircraft purchases and spare parts.

Atiku warns against re-gazetting tax laws

Meanwhile, former Vice President Atiku Abubakar has warned against any move to re-gazette the tax laws, insisting that only a fresh legislative passage and presidential assent can make them valid.

He cautioned that hurried re-gazetting would set a dangerous constitutional precedent, especially amid allegations that the versions of the tax laws gazetted by the Presidency differ from those passed by the National Assembly.

In a statement on Sunday, Atiku stated that any law published in a form not passed by the legislature is “a nullity,” emphasising that gazetting is merely an administrative act and cannot cure illegality.

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