Economy
Airlines, stakeholders reject new aviation tax burden
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Airline operators in Nigeria’s aviation industry, backed by international and local stakeholders, have rejected the Federal Government’s plan to impose additional taxes on scheduled airlines under the Nigeria Tax Act 2025, warning that the move could devastate the sector and worsen the plight of passengers already facing record-high ticket prices.
The operators made their objections known during a Business Webinar held on Thursday with the theme “Nigeria Tax Act (2025) and the Aviation Industry.” The session, monitored by our correspondent, featured strong opposition led by Dr Samson Fatokun, Area Manager for West and Central Africa at the International Air Transport Association.
Stakeholders argued that the aviation sector is already overburdened by excessive charges and levies. Domestic operators currently pay Passenger Service Charge, Ticket Sales Tax, Cargo Sales Charge, five per cent on all aviation contracts, and a $20 security levy.
Recently, the Advance Passenger Information System introduced charges of $11.50 per passenger on each flight leg. Passengers have borne the brunt of these costs, with domestic airfare doubling in the past year, forcing many Nigerians to abandon air travel for road transport.
Capt. Edward Boyo, founder and Managing Director of Landover Company Limited, described the reforms as “a disadvantage to the growth of Nigeria’s aviation sector.” He appealed to President Bola Tinubu and Federal Inland Revenue Service Chairman, Dr Zacch Adedeji, to review the charges.
“The country’s economy cannot grow without aviation. Jobs cannot be created if nothing is done to improve the fortunes of this industry. If these tax burdens persist, operators may have no choice but to raise fares further,” Boyo warned.
Representing the government, the Assistant Director and Tax Policy Adviser at the FIRS, Mrs Nkechi Umegakwe, insisted that the new tax laws followed due diligence and were designed to strengthen compliance, boost revenue, and align Nigeria’s tax system with global standards.
She explained that from January 1, 2026, airlines would be required to pay Value Added Tax on their services, including the importation of commercial aircraft, engines, spare parts, and air tickets. “VAT is a consumption tax borne by end users, not suppliers. Once the reforms become operational, whatever airlines bring in—aircraft, engines, spare parts—will be liable to VAT,” she stated.
Umegakwe stressed that the reforms are part of a comprehensive fiscal strategy aimed at enhancing Nigeria’s ease of doing business while raising much-needed government revenue.
But Dr Fatokun of IATA countered that the policy directly contradicts international treaties and agreements Nigeria has signed. He reminded the government that under International Civil Aviation Organisation rules, to which Nigeria is a signatory, international air transportation of passengers is explicitly exempt from taxation.
He also cited a Supplementary Act of the Economic Community of West African States signed on December 14, 2004, which prohibits taxation on the transportation of passengers and goods by air within member states. “Nigeria cannot sign international and regional treaties only to breach them through domestic legislation. That would portray us as unserious in the comity of nations,” Fatokun warned.
He emphasised that any new tax regime must respect Nigeria’s treaty obligations, noting that even past attempts to impose VAT on domestic air passenger services generated disputes.
Industry experts warn that the aviation sector is approaching a breaking point. The rising cost of operations, driven by multiple levies, foreign exchange volatility, and high fuel costs, has already led to ticket price hikes, reducing demand for air travel.
Capt. Samuel Caulcrick, an economist and former Rector of the Nigerian College of Aviation Technology, appealed for the exclusion of the sector from additional tax burdens. “The airlines are being choked. Without relief, operators will collapse under these costs,” he said.
Stakeholders stressed that the aviation industry plays a pivotal role in economic growth, connectivity, and job creation. They argued that overtaxing the sector will undermine its ability to support trade, investment, and regional integration.
Boyo urged the Federal Government to classify aviation as a “priority sector” in its tax framework. “The government must get acquainted with international rules binding our aviation industry. If properly supported, aviation can drive economic expansion and employment opportunities,” he said.
For ordinary Nigerians, the implications are clear: more expensive air tickets. Already, airfares have doubled within a year, with operators blaming operational costs and excessive taxation. Should VAT be imposed on imported aircraft, parts, and tickets, airlines warn that the costs will be passed down to passengers.
Industry analysts fear this could reverse Nigeria’s modest gains in air connectivity, especially at a time when regional integration under the African Continental Free Trade Area (AfCFTA) depends heavily on efficient air transport.
Across the board, operators, economists, and international regulators are appealing to President Tinubu to intervene before January 2026. They argue that while tax reform is important for government revenue, aviation should not be treated the same as other industries given its international legal frameworks and critical role in economic development.
As the countdown to the implementation date begins, the industry remains divided between a government pushing for fiscal reforms and operators warning of an existential threat. The coming months will determine whether Nigeria opts to renegotiate its aviation tax framework in line with treaty commitments or risk worsening a sector already in turbulence.
The Naira yesterday appreciated to N1,387 per dollar from N1,390 in the parallel market on Monday.
Similarly, the naira appreciated to N1,322.9 per dollar in the Nigerian Foreign Exchange Market, NFEM.
Data from the Central Bank of Nigeria, CBN, showed that the indicative exchange rate for the naira fell to N1,322.9 per dollar from N1,320 per dollar on Monday, indicating N2.9 appreciation for the local currency.
Consequently, the margin between the parallel and official markets narrowed to N64.1 per dollar from N70 per dollar on Monday. The value of interbank turnover in NFEM declined by 48.07 percent to $55.6 million from $107.07 million on Monday.
The Central Bank of Nigeria (CBN) has announced that it will be paying closer attention to how banks and other financial institutions in the country are being used, or misused, to move money that could fund terrorism.
In a statement signed by Hakama Sidi-Ali, Acting Director of the apex bank’s Corporate Communications and Investor Relations Department on Tuesday, the CBN said it has made terrorism financing supervision one of its current priorities. According to the statement, this is part of the bank’s “ongoing commitment to protecting the Nigerian financial system from abuse by illicit actors.”
What this means in plain terms is that the CBN will be looking more closely at how banks identify and manage the risk of their platforms being used to fund terrorism, how well they monitor suspicious transactions linked to terrorism financing, how they carry out sanctions ordered against specific individuals or groups, and how promptly they report suspicious activity connected to terrorism financing.
The statement explained that this new push covers four broad areas: how financial institutions manage terrorism financing risk, how they monitor transactions for signs of terrorism financing, how they carry out targeted financial sanctions, and how they report suspicious transactions linked to terrorism.
The apex bank said it will not be sitting back and waiting for problems to surface on their own. Instead, it plans to use a risk-based approach, which means banks and institutions seen as more exposed to this kind of risk will attract closer attention.
This will involve both on-site inspections, where CBN officials visit institutions directly, and off-site checks, where the bank reviews reports and data from a distance.
The goal, the statement said, is to support “effective Anti-Money Laundering, Countering the Financing of Terrorism and Countering Proliferation Financing (AML/CFT/CPF) controls across the financial sector,” referring to the fight against money laundering, terrorism financing, and the financing of weapons proliferation, all of which are governed by existing Nigerian laws and regulations.
The CBN also linked this move to Nigeria’s wider efforts, both at home and internationally, to fight terrorism financing and the financing of weapons proliferation, and to protect the integrity of the country’s financial system.
The apex Bank did not name any specific institution under investigation or give a timeline for these actions, but noted that “further supervisory engagement will be undertaken as appropriate,” suggesting that more steps could follow depending on what its checks turn up.
For the ordinary Nigerian, the announcement signals that the CBN wants banks to be more careful and more accountable in how they track the movement of money through the financial system, particularly where there is any possible link to terrorism or the funding of violent groups.
It is also a reminder that financial institutions operating in Nigeria are expected to follow strict rules designed to keep the banking system safe from being used for illegal purposes.
The Federal Government has approved a new pensionable salary structure for personnel of the Nigerian Armed Forces.
The new structure affects personnel in the Nigerian Army, Nigerian Navy and Nigerian Air Force and took effect from September 1, 2026.
The approval was contained in a circular issued on September 3 by the National Salaries, Incomes and Wages Commission.
Under the new arrangement, Generals, Admirals and Air Chief Marshals occupy the highest level, with their annual pensionable salaries ranging from ₦21.9 million to ₦29.75 million, depending on their salary steps.
The highest figure works out to roughly ₦2.48 million per month when divided by 12.
Lieutenant Generals, Vice Admirals and Air Marshals will have annual pensionable salaries between ₦16.99 million and ₦25.91 million.
Major Generals, Rear Admirals and Air Vice Marshals will receive pensionable salaries ranging from about ₦14.98 million to ₦23.9 million annually.
For Brigadier Generals, Commodores and Air Commodores, the approved annual pensionable figures range from ₦13.86 million to ₦16.39 million.
Colonels, Captains and Group Captains will have annual pensionable salaries between ₦8.31 million and ₦9.49 million, while Lieutenant Colonels, Commanders and Wing Commanders will fall between ₦7.55 million and ₦8.74 million.
Majors, Lieutenant Commanders and Squadron Leaders will have pensionable salaries ranging from ₦5.99 million to ₦7.01 million annually.
Captains, Lieutenants and Flight Lieutenants will receive between ₦5.28 million and ₦6.42 million.
At the junior officer level, Second Lieutenants, Midshipmen and Pilot Officers will have annual pensionable salaries ranging from ₦4.92 million to ₦5.59 million.
The new structure also covers non-commissioned personnel.
Warrant Officers across the three services will have annual pensionable salaries between ₦4.53 million and ₦5.17 million, while Master Warrant Officers will receive between ₦3.94 million and ₦4.93 million.
Warrant Officers will have annual pensionable salaries ranging from ₦3.46 million to ₦4.35 million. Staff Sergeants, Petty Officers and Flight Sergeants will have figures between ₦2.98 million and ₦3.76 million.
Sergeants and Leading Seamen will have annual pensionable salaries ranging from ₦2.81 million to ₦3.16 million, while Corporals and Able Seamen will receive between ₦2.48 million and ₦2.73 million.
Lance Corporals and Seamen will have pensionable salaries between ₦2.32 million and ₦2.58 million annually.
Privates, Ordinary Seamen and Aircraftmen will have figures ranging from ₦2.28 million to ₦2.49 million.
The government clarified that the amounts contained in the new schedule are meant for calculating pension benefits.
They should not be treated as the actual monthly salaries or take-home pay of serving military personnel.
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