Domestic airlines, under the aegis of Airline Operators of Nigeria, have raised the alarm over the recently signed Tax Reform Act, warning that its implementation from January 1, 2026, could cripple their operations within 48 hours.
On June 26, 2025, President Bola Tinubu signed four Tax Reform Bills into law, including the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service Act, and the Joint Revenue Board Act, to take effect in five months’ time.
Vice Chairman of AON, Mr. Allen Onyema, gave the warning as the Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane, urged the federal government to maintain policy consistency to rebuild investor confidence and attract global aviation capital to the air transport sector.
Onyema, also the Chairman of Nigeria’s largest flag carrier, Air Peace, and Rewane spoke at the 29th edition of the annual conference of the League of Airport and Aviation Correspondents, with the theme, ‘Financing Aviation in Nigeria: Risks, Opportunities and Prospects.’
While the AON expressed sadness over excessive taxation affecting domestic airlines’ efficiency, Rewane noted that with the air transport sector contracting by 0.81 per cent in Q1 2025, making it the sixth consecutive quarterly decline, the government must step up support for the industry.
Speaking at the conference, Onyema said: “If you invest $100 million in aviation, you will be expecting three to five per cent profit. It is not the same in agriculture or importation where you may get up to 70 per cent profit. We make profit, but it is marginal and there is also taxation.
“The airlines in this country are taxed to death. We pay all sorts of charges. As AON, the five per cent we pay for ticket sales to the NCAA is affecting airlines because we do not make five per cent gains. They will tell you that money does not belong to us but to them. I am not saying we should not pay anything to government, but it has to be cost recovery.
“It is so all over the world, even the International Civil Aviation Organisation states that. Now, with the current tax reforms, which I do not know who put it there, we have to go back to the regime of paying Customs duties for imported aircraft, spare parts and even tax on ticket fares.
“The airlines will die within 48 hours. However, I am happy that the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, has taken it up because if it is ever implemented from January next year, airlines will die. It is never done anywhere in the world.”
On his part, Rewane said: “The air transport sector contracted by 0.81 per cent in Q1 ’25, the sixth consecutive quarterly decline. Government should focus on policy and regulation. Policy consistency is crucial for rebuilding trust with global investors and attracting global aviation capital.”