AM EDITORIAL: How Nigeria’s New Tax Act Tasks Aviation Industry’s Survival
Nigeria’s aviation stakeholders at a business webinar jointly organized by Aviation & Allied Business and the Federal Inland Revenue Service (FIRS), under the theme, “Nigeria Tax Act (2025) & The Aviation Industry,” had described the new tax Act as being inconsistent with international treaties, counterproductive to Nigeria’s aviation growth, and retrogressive for the struggling industry.
We stand with industry on this, and in the light of international treaties that Nigeria is obliged to comply with. Nigeria’s internal legislation and laws should align with regional and international agreements to avoid contradictions.
A policy statement from the African Union Ministers Responsible For Transport says “Member States should ensure that revenues generated by the civil aviation sector are re-invested in this sector in accordance with ICAO’s policies on charges (Doc 9082), while refraining from imposing taxes for the sale or use of international air transport.” (Doc 8632).
The December 14, 2024, ECOWAS Supplementary Act, signed by Nigeria’s President Bola Tinubu, exempts air passenger and cargo transport from taxation effective January 1, 2026.
The international Air Transport Association (IATA) “strongly opposes any form of tax or fee where the resulting revenue is not reinvested in the aviation industry and is merely meant to increase general government revenues.”
Even sections 22 and 23 of the Civil Aviation Act 2022, exempt the aviation sector from taxation on income. Applying the New Tax Act therefore could result in double taxation. So, it is important for the Federal Inland Revenue Service and the aviation authorities to reconsider these possible conflicting areas of our laws.
The implications of the Nigeria Tax Act 2025 if implemented, are far reaching. Airlines in Nigeria already face unavoidable operating costs and have standard costs they must pay, leaving them to rely on revenue from passengers. They have continued to struggle with high operating costs, foreign exchange pressures, and declining passenger traffic. Value Added Tax (VAT) on airline tickets could worsen already low traffic numbers as individual purchasing power in the country has highly diminished.
Aviation is a global business governed by treaties on taxation, finance, and economics. There is need for the House of Representatives and Senate Committees on Aviation to in detail, review the new tax laws in relation to the ICAO Document 8632.
If government still expects Nigeria’s aviation industry to survive, it is also important to re-emphasize as a reminder that the sector is for cost recovery. This informs ICAO’s Document 9082 permitting the imposition of charges only for services provided and functions performed for civil aviation operations.
The practice of making deductions from aviation agencies requires legislative review as government should not be taking money from cost recovery organizations. This informed the appeal of Managing Director of Nigeria Airspace Management Agency (NAMA), Engr. Farouk Umar in his opening remarks at a four-day retreat of the House of Representatives Committee on Aviation in Abuja on September 17, 2025. He canvassed for the intervention of the National Assembly to end the 50% revenue deductions and called for the full enforcement of section 9(2) of the NAMA Act 2022 which stipulates that “all fees and charges imposed by NAMA are not subject to deductions or remittance to any other body.”AM
