The reintroduction of Value Added Tax (VAT) on airline tickets, aircraft, and spare parts has sparked strong opposition from Nigerian airlines, who warn that rising fiscal pressures are pushing the aviation sector toward collapse. Operators argue that overlapping taxes and levies are undermining growth, shrinking route networks, and weakening Nigeria’s competitiveness within Africa.

From January 2026, revised tax laws will reinstate a 7.5% VAT on domestic tickets, aircraft purchases, and spare parts, ending a five-year exemption. This comes on top of existing ticket sales charges, customs duties, and regulatory fees, pushing total deductions on a single ticket above 12%. Airlines say these costs have driven fares sharply higher, suppressed passenger demand, and left little room for reinvestment.

Industry figures show domestic passenger traffic fell by 13.6% between 2022 and 2024, even as demand for air travel remains strong. Airlines are now cutting routes, grounding aircraft, and delaying maintenance, while foreign carriers dominate international traffic under more favorable tax regimes. Industry leaders are calling for the restoration of VAT exemptions and a streamlined tax framework to prevent further damage to the sector.