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N1million domestic flight: You’re raising false alarm Oyedele chides Onyema
Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, on Monday, pooh-poohed the contention that the new tax laws would hurt Nigeria’s aviation industry more than it would help it, stating that the new regime would actually reduce costs of doing business in the sector.
Against the backdrop of the lamentation of Allen Onyema, Chairman of Air Peace, one of Nigeria’s frontline airlines the coming of the new tax laws, expected to commence on January 1 that the development would be so devastating that airfares for domestic flights could hit more than ₦1 million, Oyedele, poured cold water on such fears.
Using his X account, he said concerns raised the airline’s boss while appearing on ARISE NEWS interview on Sunday, that the tax reforms could force airlines out of business and trigger massive fare increases, was actually not the true story.
He wrote: “We recognise the genuine challenges facing Nigeria’s aviation industry, particularly the burden of multiple taxes, levies, and regulatory charges.
“Contrary to the claim that the new tax laws will hurt the industry, the reform is part of the solution, not the source of the problem. Several long-standing tax issues driving costs in the sector have been resolved in the new tax laws or are being structurally addressed including:
- Witholding tax on aircraft leases
The single biggest tax burden on airlines has been the 10 percent withholding tax (WHT) on aircraft leases under the existing law. This has now been removed and replaced with a rate to be determined in a regulation, creating the legal basis for either a full exemption or a significantly lower rate.
To put this in context, on a $50 million aircraft lease, an airline currently pays $5 million in WHT, which is non-recoverable and therefore directly increases operating costs and strains cash flow. Eliminating this burden is a major structural relief for the sector.
- VAT-From hidden cost to true neutrality
While the temporary VAT suspension introduced in 2020 following COVID-19 was attractive, it came with a hidden cost. Airlines could not recover input VAT on non-exempt items including certain assets, consumables, and overheads, meaning VAT became embedded in costs.
Under the new tax laws, airlines become fully VAT-neutral. Any VAT paid on imported or locally procured assets, consumables, and services will become fully claimable. Where an airline has excess input VAT, the law mandates a refund within 30 days, supported by a fully funded tax refund account and the option to offset VAT credits against other tax liabilities. This directly reduces cost pressure and improves liquidity.
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Existing exemptions on commercial aircraft, engines, and spare parts remain fully in place. There is no reversal or new burden introduced under the tax reforms.
- Impact on ticket prices
Airline operations are inherently low-margin. A 7.5 percent VAT on tickets, within a system where input VAT is fully recoverable, results in a significantly lower net impact than the headline rate suggests. Even in a worst-case scenario where VAT were not claimable, the maximum impact would still be 7.5 percent, not the price increases being suggested. That is, a N125,000 ticket becomes not more than N134,375 and a N350,000 ticket not more than N376,250.
- Corporate Income Tax
The new law provides a framework to reduce corporate income tax from 30 percent to 25 percent which will benefit airlines. In addition, several earmarked profit-based levies including Tertiary Education Tax, NASENI, NITDA and Police levies have been harmonised into a single Development levy, reducing complexity and ensuring certainty.
- Multiple levies and charges
The multiplicity of levies imposed on airlines and flight tickets is real, but these charges are not created by the new tax laws. It is therefore incorrect to attribute them to the reform. The government is actively working with operators and relevant agencies to achieve a lasting solution. Importantly, the tax harmonisation provisions in the new laws mean the situation can only improve, not worsen, from 2026.
Conclusion
Overall, the new tax laws provide a strong legal and policy framework to resolve the long-standing tax challenges in the aviation sector, reduce operating costs for airlines, and ensure minimal impact on passengers.
If the current engagement with industry stakeholders is sustained, the remaining non-tax issues will be resolved sooner rather than later. Claims not grounded in fact do not help this process. The new tax laws are not the problem, they are a critical part of the solution.”
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The echoes of the drums rolled out to celebrate the rescue of the 44 teachers and students, kidnapped from some schools in Oyo State, after 56 days in the bush, would surely be disrupted abruptly, with the divergent echoes of a fresh abduction, this time coming from Kogi State.
Reports indicate that the gunmen, struck on Tuesday at the Government Secondary School, Odo-Ekina, in Dekina Local Government Area of the state, abducting four students, the school principal and a National Examinations Council (NECO) ad hoc staff member.
Authorities of the Kogi State Police Command, who immediately unleashed their operatives in hot pursuit of the abductors, said the attack occurred at about 5:25 p.m. while the students were writing their NECO examination.
Saliu Oyiza Afusat, an Assistant Superintendent of Police (ASP) and spokesman of the command, said a combined team of police personnel and other security agencies has launched a search-and-rescue operation following the incident.
Informing that one of the students was actually rescued immediately, she said efforts were ongoing to secure the release of the remaining victims and apprehend the attackers, adding that Naziru Bello Kankarofi, the state Commissioner of Police, alongside the Brigade Commander and the State Security Adviser to the Governor, Commodore Jerry Omodara (Rtd), were already on the way to the scene for an on-the-spot assessment.
Oil prices are expected to go down now with the announcement of Donald Trump, US President that he will no longer impose a 20 percent “safe passage” fee on ships passing through the Strait of Hormuz.
The POTUS, hinged his reversal of the decision on the intervention from some Gulf countries, who pleaded with him not to toe the line due to the massive economic impact the decision would make on the region.
Indeed, oil prices had shot up immediately Trump announced the new levy on Monday while declaring the US ‘the guardians of the Hormuz strait,’ a measure which he said was to pay for the cost of guarding the volatile area in order keep supply of oil flowing.
Reports said that Gulf allies of the US worked frantically to get Trump on the phone in time to talk him out of the idea altogether, while a flurry of appeals came from Saudi Arabia, the United Arab Emirates, Bahrain and Qatar.
In response, the POTUS, posting on his Truth Social platform, wrote: “Based on highly productive conversations with Middle East leadership, I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States.”
Trump, who said the investments would be “MASSIVE but, at the same time, extraordinarily good for them, and their future,” added that the deals would see factories, plants, and equipment pour into the US at “Historic levels.”
The Gulf nations have committed to invest trillions of dollars in the US, though it remains unclear how much of that they will actually spend over the next several years.
Meanwhile, the US continues to bomb Iran in what appears to be a resumption of active conflict between both countries, despite an ongoing roadmap to end the conflict.
Reports say operatives of the Osun State Police Command, and those of the Department of State Services (DSS) had tracking the trail of Adeniyi Adeyemi, controversial Director General of the Presidential Foreign Intervention Promotion Council (PFIPC), for weeks, before he was eventually pulled out of his hole on Tuesday.
However, the duo, were said to have pulled back after failing to track him through his mobile phones, which he had reportedly switched off for about two days, making it difficult to locate him, leaving the stage for the members of the Police Intelligence Response Team (PI-RT) led by Moses Lohor, a Chief Superintendent of Police (CSP).
Lohor, said to have previously served as the Commander of the Anti-Kidnapping Squad of Osun State, and reported to have been involved in high-profile security operations and controversies, after taken over fielded his men to pick up signals from their well-oiled signal networks.
Regarded by many Osun residents as one of the key security officers who contributed significantly to the peace and stability enjoyed in Ilesa and other parts of the state during his tenure, he was said to have relied on his contacts before his transfer out of the state, said to have raised concerns from the public about the security situation he would be leaving behind.
His exit from the state was said to be hinged on an incident in 2024, in which he allegedly shot one Iyanda Alowonle, then Chairman of Osun State Motor Transport System, in the stomach at the police station in the state prompting an order for his arrest by then Inspector General of Police (IGP).
His effort was said to have paid off when he successfully tracked down the controversial PFIPC, boss, who was seen on Tuesday evening, in a shot video on social media undergoing interrogation, and eventually handed him over to Ibrahim Gotan, Commissioner of Police in the state.
The PUNCH quoted one of the sources as saying: “The arrest (of Adeyemi) took place on Tuesday morning by the IRT squad, who immediately moved him to Abuja. After he was arrested, he was taken to Ibadan and from there to Abuja.”
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