Airfares may hit ₦1m as new tax laws take effect — Onyema

Chairman and Chief Executive Officer of Air Peace, Allen Onyema, has warned that Nigeria’s new tax regime could push domestic airfares to as high as ₦1 million and threaten the survival of local airlines.

Speaking on ARISE NEWS, Onyema said the aviation sector is already weighed down by numerous taxes and regulatory charges, leaving airlines with only a fraction of ticket revenue.

According to him, on a ₦350,000 ticket, airlines sometimes receive barely ₦81,000 after deductions. He added that the mandatory 5 percent charge to the Nigerian Civil Aviation Authority and several other fees are stifling growth.

Onyema noted that earlier tax reforms in 2020 removed customs duties and VAT on aircraft, spare parts, and ticket fares — reliefs he said were crucial for operators. However, the latest tax law has restored those charges, including a 7.5 percent VAT on imported aircraft and spare parts.

He warned that the added costs, combined with high-interest bank loans, could force fares sharply upward and push airlines toward collapse, ultimately hurting passengers and the wider economy.

Onyema said airline operators have raised concerns with lawmakers and the government’s tax reform team, urging authorities to revert to the 2020 tax framework and create more supportive policies for the sector.

He stressed that aviation is essential to economic growth and national connectivity, and called for targeted fiscal and regulatory support to keep airlines afloat and encourage investment.