NCAA Summons Overland Airways Over VAT Charges on Pre-2026 Air Tickets
- The NCAA summoned Overland Airways over a complaint about VAT charged on a ticket purchased in 2025
- Airlines were previously exempt from VAT, but new tax laws took effect from January 1, 2026
- Overland Airways argued that aviation taxes apply when tickets are flown, not when they are bought
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Nigerian Civil Aviation Authority (NCAA) has summoned Overland Airways over a dispute concerning the payment of value-added tax (VAT) on air tickets purchased before the new tax regime took effect in 2026, The Cable reported.
According to a statement by Michael Achimugu, the NCAA’s director of public affairs and consumer protection, the airline was invited following a complaint by a passenger on X who alleged that her 86-year-old grandmother was asked to pay an extra N11,286 as VAT on a ticket bought in 2025.
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The issue comes against the background of a policy shift on aviation taxation. Airlines were previously exempt from VAT on air tickets, but in September 2025, the Nigeria Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS), announced that airlines would become liable to VAT on tickets from January 1, 2026, when new tax laws took effect.
Achimugu said the NCAA has since met with Overland Airways to hear the airline’s explanation.
He explained that the authority’s team at the meeting included the directors of consumer protection and air transport regulations, the general manager of policy and enforcement, officials from flight operations and adjudication, and lawyers from the NCAA’s legal directorate.
Confusion over application of aviation taxes
According to the NCAA spokesperson, Overland Airways argued that aviation taxes are applied when a ticket is flown, not when it is purchased. The airline also claimed it had a standing understanding with the tax authority to that effect.
“The airline’s argument is that tax in aviation is charged on the ticket flown. Not when the ticket is purchased. They claim to have a standing agreement with the tax body in this regard,” he said.
However, Achimugu said the NCAA maintained that any previous arrangement would be overridden by the new tax laws, unless the NRS clearly states otherwise.
He added that the NCAA’s director of air transport regulations had earlier confirmed, based on guidance from tax policy expert Taiwo Oyedele, that VAT should not apply to tickets purchased before 2026, although official clarification from the NRS is still required.
NCAA asks Overland Airways to seek clarification
The NCAA has therefore directed Overland Airways to seek formal clarification from the NRS on whether VAT can be applied retrospectively to tickets bought before 2026 but flown afterwards.
Achimugu noted that the airline expressed concern about the possibility of being asked to pay accumulated taxes if the NRS rules in favour of such charges.
He added that the authority has instructed Overland Airways to refund all affected passengers if the NRS confirms that tickets purchased before 2026 should not attract VAT. The airline, he said, has agreed to comply and will submit the NRS response to the NCAA within 10 days.
Source: Getty Images
New tax regime may cause hike in airfares – Air Peace CEO
Legit.ng earlier reported that the Chief Executive Officer (CEO) of Air Peace expressed concern over the possible impact of the new tax regime on airfares in Nigeria.
He argued that the new tax provisions threaten soaring flight fares and airline operations, urging the government to intervene to protect private operators in the aviation industry.
Onyema dismissed the widespread belief that Nigerian airlines are profiteering from high ticket prices. According to him, a large portion of ticket revenue are taxes paid to the government.
Source: Legit.ng
