Tax Reforms Act’ll cripple our operations in 48 hrs — AON

Operators within Nigeria’s aviation sector specifically the Airline Operators of Nigeria (AON) have raised an urgent alarm regarding the newly enacted Tax Reform Act. Speaking at the 29th Annual Conference of the League of Airport and Aviation Correspondents, Dr. Allen Onyema, AON’s Vice President, warned that provisions in the Act particularly the imposition of customs duties and a 7.5% VAT on imported aircraft, spare parts, and even airfares could be devastating. He stressed, “The airlines will die within 48 hours if this should happen,” underscoring the enormity of the potential impact .

What’s Behind the Claim?

The new tax regime reintroduces VAT on aviation inputs and services, a move contrary to global aviation norms and ICAO standards, which generally oppose VAT on air services

Aviation operators argue this would dramatically raise operational costs, leading to potential collapse of local airlines, widespread job losses, and negative ripple effects including social instability .

When Is the Act Going Into Force?

President Tinubu signed the suite of tax reform bills collectively called the Nigeria Tax Act, 2025 on June 26, 2025 .

However, the reforms will officially take effect from January 1, 2026, providing a transition buffer for businesses and government agencies to prepare .

Key Considerations

Cripple operations within 48 hours- This is a warning of potential impact based on worst-case operational cost scenarios, not a confirmed immediate effect.

Implementation window The six‑month lead time offers opportunity for advocacy, seeking exemptions, and operational preparedness.

What Could Happen Before January 2026?

Without targeted sectoral consultations or exemptions, aviation operators fear the tax measures could impose unbearable financial strain .

Agencies like NCAA and NAMA also worry about loss of internally generated revenue due to the consolidation of tax authority under the new Nigeria Revenue Service (NRS) .

Legal and operational disputes may emerge, especially given prior concerns over unclear VAT revenue-sharing and agency roles .

In short: The "48-hour collapse" scenario is a dramatic but illustrative warning from AON against the aviation sector bearing new taxes. The reforms don’t kick in until January 1, 2026, giving stakeholders a critical window to engage, negotiate, and advocate for aviation-safe provisions.