NCAA Clarifies: FG Tax Reform Didn’t Trigger Flight Price Hikes
The Nigerian aviation sector is currently embroiled in a heated debate over the dramatic surge in domestic airfares, leading to a direct confrontation between the regulatory body and industry operators. In a definitive statement released on Monday, December 29, 2025, the Nigeria Civil Aviation Authority (NCAA) dismissed claims that federal tax policies are the catalyst for the current price surge. While airline operators have pointed toward a “choking” regime of multiple levies, the NCAA flight prices clarification insists that the astronomical ticket costs seen this December are strictly the result of seasonal market forces, specifically the intersection of high demand and limited supply.
The debate intensified after the Chairman and Chief Executive Officer of Air Peace, Allen Onyema, warned that mounting fiscal pressures could soon force domestic base fares to unprecedented levels. He argued that a significant portion of airline ticket prices is consumed by statutory charges and levies, leaving operators with only a fraction of the advertised fare.
Onyema further contended that provisions in the 2025 Tax Act, signed into law by President Bola Ahmed Tinubu, removed long-standing VAT and customs duty exemptions on aircraft parts and engines, thereby increasing operating costs for local airlines already grappling with high interest rates and expensive overseas maintenance obligations.
However, the NCAA has countered these assertions in strong terms. According to the agency’s Director of Public Affairs and Consumer Protection, Michael Achimugu, the widely circulated claim that airlines pay as many as 18 different taxes is inaccurate and misleading. He stated that domestic carriers do not face the volume of levies being alleged and noted that airline executives had acknowledged this reality during engagements with regulators.
The Authority also questioned the logic behind attributing December’s fare hikes to taxation, pointing out that there have been no recent increases in statutory charges or aviation fuel prices that could justify the sudden escalation in ticket costs.
Achimugu emphasized that the current pricing trend reflects consumer behavior rather than government action, describing it as a case of market forces at work during a high-demand travel window. He stressed that if taxes were truly responsible, fare increases would have coincided with changes in policy, not appeared sharply during the holiday rush. From the regulator’s perspective, the situation underscores the imbalance between passenger demand and available seats, rather than any fiscal intervention by government agencies.
While acknowledging the introduction of the $11.50 Advance Passenger Information System levy, the NCAA clarified that the charge is designed strictly for security and data management purposes, not as a revenue-driven tax. In a move aimed at protecting consumers, the Authority has directed domestic airlines to provide clearer and more detailed fare breakdowns to improve transparency. As broader tax reforms are set to take effect from January 1, 2026, the regulator says it will maintain close oversight of airline pricing to prevent unfair practices.
For now, the NCAA’s position remains unequivocal: the elevated cost of domestic air travel this festive season is a temporary outcome of holiday demand pressures, and linking the price hikes to federal tax reforms is a misrepresentation that diverts attention from the true market realities driving airfare inflation.
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