{"id":90431,"date":"2025-12-28T19:49:40","date_gmt":"2025-12-28T19:49:40","guid":{"rendered":"https:\/\/dnllegalandstyle.com\/dnl\/?p=90431"},"modified":"2025-12-28T19:49:53","modified_gmt":"2025-12-28T19:49:53","slug":"new-tax-law-airfares-may-hit-%e2%82%a61-million-air-peace-ceo-onyema-warns","status":"publish","type":"post","link":"https:\/\/dnllegalandstyle.com\/dnl\/new-tax-law-airfares-may-hit-%e2%82%a61-million-air-peace-ceo-onyema-warns\/","title":{"rendered":"New tax law: Airfares may hit \u20a61 million, Air Peace CEO Onyema warns"},"content":{"rendered":"\n

Allen Onyema, Chairman and Chief Executive Officer of Air Peace<\/a>, has cautioned that Nigeria\u2019s domestic aviation sector faces a serious financial strain as recently enacted tax provisions risk pushing ticket prices beyond \u20a61 million and forcing airlines to suspend operations. <\/p>\n\n\n\n

Speaking in an interview with ARISE NEWS on Sunday, Onyema said urgent action is needed to prevent a potential collapse of the industry, which could have ripple effects on passengers, banks and the wider economy.<\/p>\n\n\n\n

\u201cThe Nigerian airlines are heavily overburdened by taxes, levies, and all manner of charges. Just take a ticket of about 350,000. What comes to the airlines is about 81,000 Naira. And people, everybody\u2019s talking about the airlines as if they\u2019re making a kill. It\u2019s not true,\u201d Onyema said.<\/p>\n\n\n\n

He criticised what he described as multiple and overlapping charges, including a mandatory five per cent deduction on every ticket to the Nigerian Civil Aviation Authority (NCAA). <\/a><\/p>\n\n\n\n

\u201cWe are suffering multiple taxation, multiple charges. For example, the NCAA, 5% for every ticket, mandatorily. That is to NCAA alone.<\/p>\n\n\n\n

There are so many other charges,\u201d he added.
Onyema stressed that the charges undermine passenger demand and conflict with global aviation standards, noting that the International Civil Aviation Organisation (ICAO) <\/a>recommends cost recovery rather than revenue generation. <\/p>\n\n\n\n

\u201cThat is, you charge according to the cost of the services you render to the airlines. Who are the ones suffering? The airlines. And that\u2019s why the airlines are not growing,\u201d he said.<\/p>\n\n\n\n

He contrasted the current policy with the 2020 tax law, which removed customs duties and VAT on imported aircraft, spare parts, engines and ticket fares, providing critical relief to operators. <\/p>\n\n\n\n

\u201cNow, the\u00a0tax law<\/a>\u00a0of 2020 removed customs duties, removed on imported aircraft and imported aircraft spares and engines, removed VAT on imported aircraft and other spare parts, removed VAT on ticket fares. That is the 2020 Act,\u201d he said.<\/p>\n\n\n\n

Under the new law, aircraft purchases and spare parts are once again subject to 7.5 per cent VAT. Onyema cited an $80 million aircraft purchase as an example, explaining the financial implications of the tax combined with high borrowing costs from banks, which he said range between 30 and 35 per cent.<\/p>\n\n\n\n

\u201cFunds borrowed from the bank are 30\u201335%. So you bring in spare parts, you pay 7.5% on your spare parts. Ticket fares will hit $1.7 million soon. At 35% we are choking. You don\u2019t do that,\u201d he said.<\/p>\n\n\n\n

Onyema warned that these pressures will inevitably be passed on to passengers. \u201cBecause when you take 5% from what we charge, it reduces the demand. With this new tax regime? <\/p>\n\n\n\n

Yes. From January. With 7.5% on ticket fares, ticket fares will hit $1.7 million soon. If we implement that tax reform, Nigerian airlines will go down in three months; at the end of the day, economy class tickets will go to about 1.7 billion Naira if it happens.\u201d<\/p>\n\n\n\n

He said the Airline Operators of Nigeria (AON) had repeatedly presented their concerns to the National Assembly and the tax reform committee, with officials reportedly acknowledging the scale of the burden and the risks to the wider economy. <\/p>\n\n\n\n

\u201cWe submitted, nobody listened to us. We went to the National Assembly. We addressed them on this issue and they saw reasons with us. They were surprised at the kind of facts we\u2019re bringing out,\u201d Onyema said.<\/p>\n\n\n\n

Onyema argued that aviation is a key driver of economic growth and integration, noting that governments in other countries support airlines as a strategic sector.<\/p>\n\n\n\n

He urged a return to the 2020 Act, including the removal of VAT on ticket fares and imported aircraft, and called for consideration of alternative channels for equipment procurement.<\/p>\n\n\n\n

\u201cIf we implement that tax reform, Nigerian airlines will go down in three months. Within one month, some will go down. Some big ones might go down in three months because if you\u2019re bringing, you won\u2019t be able to, and the banks in Nigeria will take a hit because of what they had invested,\u201d he warned.<\/p>\n\n\n\n

Despite the concerns, Onyema commended the federal government and President Bola Tinubu for previous responsiveness to industry complaints. <\/p>\n\n\n\n

\u201cOne thing I like about the government is that they\u2019re listening. I\u2019m not being patronising. They\u2019re listening because I know so many things we\u2019ve asked them to do and they did it for us,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Allen Onyema, Chairman and Chief Executive Officer of Air Peace, has cautioned that Nigeria\u2019s domestic aviation sector faces a serious financial strain as recently enacted tax provisions risk pushing ticket prices beyond \u20a61 million and forcing airlines to suspend operations.  Speaking in an interview with ARISE NEWS on Sunday, Onyema said urgent action is needed to […]<\/p>\n","protected":false},"author":14,"featured_media":90432,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[5],"tags":[],"class_list":["post-90431","post","type-post","status-publish","format-standard","has-post-thumbnail","category-news"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t