The Chief Executive Officer of Air Peace, Mr. Allen Onyema, has warned that Nigeria’s new tax laws have reinstated aviation charges that were abolished under the 2020 tax reforms, a development he says could severely strain the operations of local airlines.
Speaking in an interview on Arise News on Sunday, Onyema said the reintroduced charges include customs duties on imported aircraft, aircraft parts and engines, as well as the imposition of Value Added Tax (VAT) on airline tickets.
According to him, the new taxes would further increase operational costs in an industry already grappling with high financing and maintenance expenses.
“There is now VAT on the importation of aircraft. If you buy an aircraft for $80 million, you are expected to pay 7.5 per cent of that amount,” Onyema said.
He noted that most airlines acquire aircraft through bank loans with interest rates ranging between 30 and 35 per cent, making the added tax burden unsustainable.
“Do the mathematics. The money is borrowed from banks at 30 to 35 per cent interest. When you bring in spare parts, you also pay 7.5 per cent VAT on those parts,” he added.
Onyema warned that the domestic aviation sector lacks the capacity to absorb additional financial pressures under the new tax regime.
“If these tax reforms are fully implemented, Nigerian airlines will go down within three months,” he said.
