Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has countered claims by Air Peace Chairman and Chief Executive Officer, Allen Onyema, that newly introduced tax laws would cripple Nigeria’s aviation industry, insisting that the reforms will instead reduce costs and support airline operations.

Oyedele said the new tax regime is designed to resolve long-standing fiscal challenges confronting airlines and should not be blamed for rising airfares or fears of an industry collapse.

His response followed Onyema’s warning during an interview on Arise Television on Sunday that domestic airlines could shut down within months if the tax reforms, scheduled to take effect from January 1, 2026, are implemented without review.

Onyema had attributed high ticket prices to multiple taxes and levies, claiming that a 7.5 per cent VAT on tickets could push economy fares as high as N1.7 million.

In a statement posted on X on Monday, Oyedele acknowledged the genuine difficulties facing the aviation sector but said government engagements with airline operators were ongoing and aimed at easing their burden.

According to him, one of the biggest reliefs under the new tax laws is the removal of the 10 per cent withholding tax on aircraft leases, which had significantly increased operating costs for airlines.

He explained that the tax, previously non-recoverable, has been replaced with a rate to be determined by regulation, allowing for a possible full exemption or substantial reduction.

Oyedele also said the reforms would make airlines fully VAT-neutral, allowing them to recover VAT paid on imported or locally sourced assets, consumables and services.

He added that excess input VAT would be refunded within 30 days or offset against other tax liabilities, improving liquidity for operators.

“We recognise the genuine challenges facing Nigeria’s aviation industry, particularly the burden of multiple taxes, levies, and regulatory charges. The Presidential Fiscal Policy and Tax Reforms Committee on behalf of the government has engaged extensively with airline operators and those engagements are ongoing.

“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,” parts of the statement read.