News Report – July 23, 2025
Airline operators in Nigeria have warned that passengers should prepare for a hike in ticket prices beginning January 2026, as the federal government rolls out a new tax regime that includes the reinstatement of Value Added Tax (VAT) on air transport services.
According to the operators, the proposed fiscal changes will significantly raise their operational costs, inevitably translating to higher airfares for domestic travelers. The revelation was made during industry consultations with stakeholders, where concerns were raised over the likely burden on both airlines and the flying public.
Under the new tax laws, set to take effect in the first quarter of 2026, aviation services which were previously exempted from VAT will once again be subject to the tax. Industry insiders say this move may dampen the already fragile recovery of the sector, which is still reeling from post-COVID economic pressures, forex scarcity, and skyrocketing fuel costs.
Airline representatives speaking to BusinessDay expressed disappointment over the policy shift, stating that the aviation industry should be given more breathing room to stabilize and expand. They argue that the reintroduction of VAT could erode passenger demand, especially among price-sensitive customers, and further strain airline profit margins.
“We are not against taxation, but the timing and impact of this reform are questionable. It will push air travel out of the reach of many Nigerians,” one operator said.
The federal government, however, maintains that the reforms are part of a broader strategy to widen the tax base and boost national revenue in line with global best practices.
With less than six months to implementation, airlines are already revisiting their pricing models in anticipation of the added financial load, signaling a likely surge in fares from early 2026. Passengers are advised to plan ahead as the industry braces for yet another shift in Nigeria’s economic landscape.