Air Peace CEO Allen Onyema has warned that new tax reforms set to take effect from January 1, 2026 could push domestic economy airfares above ₦1 million and possibly as high as ₦1.7 million if implemented without review.
Onyema told Arise News the airline industry is already under strain with multiple overlapping charges and the new tax regime threatens to erase past exemptions that helped lower costs.
Under the new tax law, Value Added Tax (VAT) and customs duties that were previously removed under the 2020 Finance Act are being reintroduced on:
Aircraft purchases and spare parts
Imported engines
Air ticket sales
These added costs could dramatically raise operating expenses and force airlines to pass the burden to passengers.
Onyema has cautioned that if the tax reforms go ahead unchanged, local airlines could collapse within months, given narrow profit margins and high borrowing costs.
The Airline Operators of Nigeria (AON) has repeatedly presented these concerns to lawmakers and the tax reform committee, but implementation is still planned.
With additional levies and VAT on tickets and imports, airlines may have little choice but to raise prices significantly in 2026.
Onyema emphasizes that increases are driven by cost realities, not profiteering, and that the sector needs policy support rather than heavier taxation.
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