FG says new tax reforms will not cause airfare hikes
Allen Onyema, Chairman and CEO of Air Peace, claimed that Nigeria’s new tax regime would harm the aviation industry and sharply increase airfares. The Federal Government, represented by Taiwo Oyedele of the Presidential Committee on Fiscal Policy and Tax Reforms, has rejected these claims, stating they are misleading. Michael Achimugu of the Nigeria Civil Aviation Authority also dismissed allegations of excessive taxation on airlines. The government maintains that the reforms are intended to reduce costs and improve the sector’s sustainability.
TLDR
- Taiwo Oyedele stated that the new tax reforms aim to resolve long-standing issues and will not increase airfares as claimed by Allen Onyema.
- The reforms remove the 10% withholding tax on aircraft leasing, which previously inflated airline operating costs.
- Airlines will become fully VAT-neutral, allowing them to claim back VAT paid on assets and services, improving liquidity.
- Existing exemptions on import duties for commercial aircraft, engines, and spare parts remain in place.
- Michael Achimugu argued that high airfares are driven by market demand, not taxes, and denied that airlines pay as many as 18 different taxes.
