Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, has clarified that aviation tax removal is not a unilateral decision and must go through a coordinated, government-wide approval process involving multiple ministries, agencies, and the National Assembly.
The minister made the remarks in Abuja on Monday during an event marking a century of aviation in Nigeria, where he addressed the industry’s longstanding concerns over multiple taxation and operational pressures facing airlines.
Keyamo stated that while stakeholders continue to push for the elimination or reduction of specific taxes that weigh heavily on airline operations, the aviation ministry does not possess the legal authority to independently scrap statutory levies.
He explained that such adjustments are embedded in federal laws and therefore require broad institutional consensus and legislative review before any policy shift can be implemented.
He emphasized that aviation administration functions within a shared governance structure, noting,
“I am not the owner of Nigeria. There’s a Ministry of Finance. There’s a tax authority. The Minister of Aviation cannot wake up overnight and say, I’m removing taxes. It’s a whole government system that will meet on that. Some of these taxes are statutory; they are laws already.”
Collective decision-making central to aviation tax removal
In reiterating the limitations of his office, Keyamo noted that genuine aviation tax removal would require formal endorsement from the Federal Ministry of Finance, the Federal Inland Revenue Service, and the National Assembly.
He explained that even when there is political will within the executive arm, statutory taxes embedded in the country’s legal framework must pass through parliamentary amendment before enforcement.
According to the minister, President Bola Tinubu has shown a strong willingness to ease the industry’s tax burden.
He recounted a recent scenario where the President exempted the aviation sector from a new tax provision that was set to take effect.
“Mr President is proactive. For the tax law that was about to take place, he immediately excluded aviation—the four percent tax. The money could have been higher,” he said.
Keyamo added that Tinubu has established a special committee to conduct a comprehensive review of the multiple taxation concerns raised by airlines and other aviation operators.
He noted that the committee’s mandate is to streamline billing structures, eliminate overlapping charges, and propose sustainable reforms that align with international best practices.
Infrastructure deficits pose the biggest threat to growth
Moving beyond the debate on aviation tax removal, Keyamo identified infrastructure deficit as the dominant challenge stalling growth in the sector.
He argued that Nigeria must urgently upgrade its major airports into functional hubs with seamless international transit capabilities if it intends to compete in the global aviation market.
“The big elephant in the room is infrastructure,” he stated.
“We need to convert our major gateways into proper hubs where you can fly in, go through a processing system without entering the country, and then board again to fly out.”
He noted that domestic carriers such as Air Peace have the operational potential to dominate cross-continental routes, but their ability to expand depends largely on the quality of airport infrastructure available.
Keyamo said that with modern hub systems, Nigerian airlines could operate competitive connecting flights similar to those offered by global giants in Dubai, Addis Ababa, and Doha.
Giving an example, he said,
“There’s no reason why Air Peace cannot take you from London to South Africa. They could lift you from London, bring you into Nigeria for transit processing, and then connect you to their flight to South Africa. You don’t even need to enter Lagos if the hub infrastructure is right.”
He stressed that without efficient hubs, domestic airlines cannot scale operations or attract the level of traffic required for significant profitability.
Financing and aircraft leasing remain major barriers
Keyamo identified aircraft financing and access to leasing arrangements as the second major challenge confronting Nigerian airlines.
According to him, the cost of aircraft acquisition, coupled with stringent leasing requirements, limits the growth potential of many carriers.
He stated that the industry requires improved access to credit, stronger financial support structures, and strategic partnerships to ease fleet expansion.
He said, “The second one is to ensure that we empower the airlines to have access to credits, financing, and aircraft leases. These are the two major problems. The problem is not the traffic; the Nigerian market itself is large enough.”
Keyamo maintained that with a population of over 200 million and a strategic geographical location between global travel corridors, Nigeria has the potential to be a major aviation hub—provided infrastructure and finance bottlenecks are addressed.
New policy reforms spark industry concerns
While the government has moved to simplify tax laws under its fiscal reform agenda, several aviation stakeholders have expressed worry about the removal of certain exemptions long considered essential for operational sustainability.
The newly introduced fiscal consolidation framework—meant to broaden revenue generation and reduce administrative redundancy—eliminated some waivers on aircraft parts, components, and Value Added Tax on air tickets.
Industry operators warn that without careful implementation and continued advocacy for broad-based aviation tax removal, airlines may face higher operational costs, which could eventually affect ticket prices and passenger load factors.
Balancing reform with sector growth
Despite the tensions around taxation and infrastructure, Keyamo reaffirmed that the government remains committed to easing the burdens confronting the aviation sector.
He stressed that although the ministry cannot single-handedly enforce aviation tax removal, ongoing inter-agency conversations reflect a shared determination to implement reforms that promote competitiveness, improve air connectivity, and position Nigeria strongly in the global aviation space.
He emphasized that reforms must be approached holistically, ensuring that whatever adjustments are made serve the broader objectives of safety, sustainability, and sectoral development.
For now, industry players await the recommendations of the presidential review team, hoping that the next phase of reforms will address both structural and financial pressures affecting domestic and international operations.
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