Nigeria’s airlines say new government taxes could shut down the sector, as President Bola Tinubu’s reforms reintroduce VAT on air tickets and customs duties on aircraft, engines, and spares from January 1, 2026.

“This policy will kill the airlines within 48 hours,” warned AON Vice Chairman and Air Peace CEO, Allen Onyema, citing thin margins, high FX costs, and multiple existing charges.

Government officials say the move is needed to expand Nigeria’s tax base and harmonise levies but insist there will be “no going back” once the law takes effect.

Operators fear the extra costs will push ticket prices up, reduce demand, and force carriers to ground planes or defer maintenance. A former aviation ministry director cautioned this could create “an undesirable safety outcome.”

Global aviation bodies urge governments to exempt air transport from VAT and import duties. IATA chief Willie Walsh said: “Adding new layers of taxation increases costs and risks, cutting connectivity.”

Analysts recommend phasing in VAT and restoring exemptions for safety-critical parts to protect both revenue and connectivity.

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The Federal Government has suspended the four per cent import duty levy after strong opposition from importers, manufacturers, and trade associations who warned it would raise costs and weaken Nigeria’s competitiveness.

In a letter dated Monday, Finance Minister Wale Edun directed the Nigeria Customs Service to halt enforcement of the levy. The decision followed consultations with stakeholders, whose feedback showed the policy calculated on the Free on Board (FOB) value of imports would fuel inflation and disrupt trade.

“Feedback has made it clear that implementing this levy would place considerable strain on trade, the cost of doing business, and overall economic stability,” the ministry said.

Business operators had resisted the charge since it was reintroduced earlier this year, warning that it would push up prices, discourage investment, and undermine Nigeria’s trade hub ambitions.

The ministry clarified that the move is a suspension, not a cancellation, allowing time for further dialogue and a review of the policy’s long-term impact. Officials pledged to design a fairer revenue framework that supports government income without stifling commerce.

For now, the decision has been welcomed as relief for businesses, though analysts caution that any future measures must be carefully structured to avoid similar backlash.

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In July, the government approved a 150-day duty-free window to facilitate the importation of maize, husked brown rice, and wheat under the Presidential Accelerated and Stabilisation Advancement Plan.

Speaking at a meeting of heads of security agencies in Abuja, Comptroller-General of Customs, Bashir Adeniyi, confirmed that the implementation of the policy would begin once the guidelines are finalized.

Adeniyi explained that the delay in implementation was to ensure all stakeholders’ interests, including farmers, were adequately considered. He assured Nigerians that some imported items already in the country would be cleared without duty and taxes.

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“There is the issue of striking a balance between the long-term interests of Nigerian farmers and stakeholders involved in the production of these items, and the short-term interest of addressing food inflation,” Adeniyi stated.

He added that the Ministry of Finance is finalizing the guidelines, and the Nigerian Customs will start implementing the fiscal policies within the next week. Adeniyi urged Nigerians to be patient, emphasizing that the suspension of duty and taxes on imported food items would help reduce food prices.

“The Nigerian Customs is committed to the implementation of this fiscal policy as outlined by the government. We believe that when implemented, it will help bring down food prices in the market,” he said.

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Adeniyi also highlighted ongoing efforts to eradicate hunger through various fiscal policies and strategic interventions from ministries, departments, and agencies. He mentioned the recent distribution of strategic food items from the national grain reserves to all states as part of these efforts.

“The President’s intervention to cushion the impact of inflation by suspending customs duty and taxes on imported food items aims to address the hunger issue highlighted by ongoing protests,” Adeniyi concluded.

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