Tax Reforms Act will cripple Airline operations in 48 hrs — AON
Domestic airlines, under the aegis of Airline Operators of Nigeria, (AON), have expressed serious concerns over the recently signed Tax Reform Act, warning that its implementation from January 1, 2026, could cripple their operations within 48 hours.
It will be recalled that on June 26, 2025, President Bola Tinubu signed four Tax Reform Bills into law, including the Nigeria Tax Act, NTA; Nigeria Tax Administration Act, NTAA; Nigeria Revenue Service Act, NRSA; and the Joint Revenue Board Act, JRBA; to take effect in five months’ time, effective from January 1, 2026.
Vice Chairman of AON, Mr Allen Onyema, gave the warning on Tax Reform Act as the Chief Executive Officer of Financial Derivatives Company, Mr Bismarck Rewane called on the federal government to maintain policy consistency to rebuild investor confidence and attract global aviation capital to the air transport sector.
The duos made their positions known when they spoke at the 29th edition of the annual conference of the League of Airport and Aviation Correspondents, LAAC, with the themed, ‘Financing Aviation in Nigeria: Risks, Opportunities and Prospects.’
Onyema, who is also the Chairman of Nigeria’s largest flag carrier, Air Peace, affirmed that the AON expressed worries over excessive taxation affecting domestic airlines’ efficiency.
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 (NCAA) 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, (ICAO), 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 highlighted that with the air transport sector contracting by 0.81 per cent in Q1 2025, making it the sixth consecutive quarterly decline, government must step up support for the industry.
“Government should focus on policy and regulation. Policy consistency is crucial for rebuilding trust with global investors and attracting global aviation capital,” Rewane added.