Calls for Tax Relief in Nigeria’s Aviation Sector
Stakeholders in Nigeria’s aviation sector have renewed their calls for the Federal Government to suspend multiple taxes and levies imposed on domestic airlines and flight tickets. They argue that these charges are severely impacting airline operations, making air travel unaffordable for many passengers.
Industry groups emphasize that easing the tax burden is crucial for stabilizing airline operations, maintaining domestic routes, and ensuring affordability amidst rising operating costs, particularly the soaring price of aviation fuel. This renewed appeal comes amid growing concerns about the cost of Jet A1 fuel, with some operators reporting sharp price increases in recent weeks.
The Airline Operators of Nigeria had previously threatened to suspend flight operations from April 20 due to the rising cost of fuel but later announced a temporary suspension of the planned shutdown after intervention by the Minister of Aviation, Festus Keyamo.
Stakeholders highlighted that approximately 35 percent of airfare paid by passengers consists of taxes, levies, and statutory charges, making Nigerian domestic tickets among the most expensive in the region. They urged the Ministry of Aviation to direct the Federal Airports Authority of Nigeria and other aviation agencies to temporarily reduce or suspend levies on local airlines and flight tickets for at least three months.
According to them, such relief would help airlines remain in business and support growth in the sector. Amos Akpan, Managing Director of Flight and Logistic Solutions Limited, listed several charges faced by operators, including cargo sales tax, passenger sales tax, charter sales tax, passenger service charges, fuel levies, import duties on aircraft spare parts, company taxes, and various regulatory fees.
Akpan also mentioned that airlines pay navigation charges, aircraft landing fees, parking charges, inspection fees, certification fees, and bank transaction deductions. He noted that a one-way ticket with a base fare of N148,000 could attract about N55,000 in taxes and additional charges.
He added that the International Civil Aviation Organisation recommends that member states remove taxes such as Value Added Tax on aircraft, spare parts, and aviation consumables. Ado Sanusi echoed this sentiment, stating that multiple taxation was undermining airline operations and threatening the survival of domestic carriers.
Sanusi emphasized that a downward review or temporary suspension of charges would help airlines withstand the current pressure of high fuel prices. Meanwhile, Keyamo appealed to airlines to suspend any plans to raise ticket fares or halt operations, assuring operators that the government was taking their concerns seriously.
He announced a high-level emergency stakeholders’ meeting scheduled for April 22 in Abuja to seek a practical and sustainable resolution to the crisis. The minister warned that any immediate increase in ticket prices would place additional hardship on Nigerians, reduce demand for air travel, and limit accessibility.
He added that shutting down operations would negatively affect the economy, disrupt logistics networks, and weaken public confidence in the aviation sector.
In a related development, the Nigerian Midstream and Downstream Petroleum Regulatory Authority dismissed fears of an aviation fuel shortage, stating that the country currently has 74 days of combined inland and refinery stock. The agency said the aviation fuel market remains adequately supplied, with current retail prices ranging between N1,960 and N2,800 per litre, contrary to claims of N3,300 per litre.
It also stated that the ex-gantry price from Dangote Petroleum Refinery and Petrochemical Company stood at N1,879 per litre as of April 16. However, stakeholders insisted that unless taxes and operational charges are reviewed, domestic airlines may still face severe financial strain despite improved fuel supply.
