Lawmakers push to harmonise aviation sector taxes, charges

• Monitors ECOWAS’ charge for travel tax cut
• Charges eating deep into carriers’ thin margin, says Minister

The Chairman of the Senate Committee on Aviation, Senator Abdulfatai Buhari, has been a vocal advocate for the harmonisation of taxes and charges in the Nigerian aviation sector, especially as the industry enters a new fiscal era in 2026.

Buhari, while speaking exclusively with Aviation Metric at the just concluded Nigeria Aircraft Acquisition and Investment Summit (NAAIS) 2026, said the push for harmonisation centres on two main fronts: domestic tax reform via the Nigeria Tax Act 2025 and regional cost reduction through the Economic Community of West African States (ECOWAS) agreements.

He said the Senate Committee was also monitoring the implementation of a regional agreement reached by West African heads of state.

Although the implementation date was set for January 1, 2026, industry reports suggest that full adoption across all agencies (such as FAAN and NAMA) has been delayed, even as Buhari and the Committee have faced pressure from stakeholders to ensure these regional commitments are reflected in the local pricing structure.

The Committee maintains that, while ticket prices are influenced by many factors (such as jet fuel and forex), these harmonisation efforts aim to stabilise fares.

Under the new structure, a ₦125,000 ticket is expected to see a maximum VAT impact of only 7.5% (roughly ₦134,375), provided the airline successfully offsets its input costs.

While tax laws address fiscal levies, agency charges (such as the 5% Passenger Service Charge and other regulatory fees) remain a separate area of negotiation among the Ministry of Aviation, the Nigeria Civil Aviation Authority (NCAA), and the Senate Committee to ensure they do not overlap with the new tax structure.

The Minister of Aviation and Aerospace Development, Festus Keyamo, has stated that the government is aware that airlines are struggling and that the current fiscal environment is tilted against local operators.

He acknowledged that cumulative charges—ranging from Ticket Sales Charge (TSC) and VAT to overflight and ground handling fees—are eating into the “already-thin margins” of Nigerian airlines.

He, however, stated that he is not the owner of Nigeria, saying, “I have no powers to unilaterally remove some taxes. It has to be a multi-agency cooperation. That’s why we are dealing with the tax authorities and the National Assembly. We feel the pain of the airlines regarding the multiple taxes attached and all that.”

He disclosed that all kinds of committees are now working to determine which ones they can retain and which ones they can remove, including the ECOWAS committee, a body that has also given them marching orders, with a matching order to ECOWAS countries to reduce taxes for airlines.

Doing that, he reiterated, will translate to lower fares for passengers, adding that they are working from all directions in this respect.

The Minister is arguing that the government must move beyond being a mere tax collector and instead become an enabler that builds the structural foundation—or capacity—necessary for local airlines to survive and compete globally.

Keyamo’s capacity strategy is built on four distinct pillars aimed at de-risking the industry. He emphasised that aircraft financing is now a national challenge rather than just a private one.

By enforcing the Cape Town Convention Practice Directions, the government has improved Nigeria’s credit rating with international lessors, enabling local airlines to access dry leases (leasing the aircraft without crew/maintenance), which are significantly cheaper than wet leases.

The Minister highlighted that building capacity means reducing dependence on foreign maintenance.

He is pushing to establish major Maintenance, Repair, and Overhaul (MRO) hubs in Lagos and Abuja.

This allows airlines to service planes locally, saving the massive foreign-exchange costs and “downtime” currently incurred by sending aircraft to Europe or Egypt.

Wole Shadare