Fresh $1bn Travel Tax Scheme Sparks Public Outcry

A new travel tax initiative introduced by the Federal Government, estimated to generate $1 billion annually, has triggered widespread protests from aviation stakeholders, travel agencies, and frequent flyers who argue that the move could further burden travelers and weaken Nigeria’s already fragile aviation industry.

The controversial policy, unveiled jointly by the Federal Inland Revenue Service (FIRS) and the Nigerian Customs Service (NCS), aims to impose a new levy on both international and local air tickets, with the goal of increasing government revenue and supporting aviation infrastructure. However, the measure has been met with strong opposition from industry players who describe it as ill-timed, counterproductive, and anti-competitive.

According to the government, the travel tax is part of a broader fiscal reform designed to diversify revenue sources, reduce overreliance on oil income, and strengthen the fiscal base for infrastructure development, especially in airports, roads, and border facilities. The new scheme, they claim, will not only boost revenue but also improve service quality in Nigeria’s aviation sector.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, explained that the travel tax was modeled after similar levies implemented in other developing economies. He noted that proceeds from the tax would be channeled into a special aviation development fund jointly managed by the Ministries of Finance, Aviation, and Tourism.

“The travel tax is a progressive measure meant to ensure that those who use the aviation system contribute fairly to its sustainability,” Oyedele said. “It will help upgrade airports, modernize facilities, and promote tourism while reducing the fiscal pressure on the federal budget.”

However, the announcement immediately sparked backlash across the travel and tourism sectors. The National Association of Nigerian Travel Agencies (NANTA), the Airline Operators of Nigeria (AON), and several civil society groups have all voiced their disapproval, warning that the policy could drive up ticket prices, discourage travel, and reduce Nigeria’s competitiveness as a regional hub.

President of NANTA, Susan Akporiaye, criticized the government’s approach, saying it failed to consider the economic realities faced by travelers and airlines. “This is not the time for another tax. Airfares are already at record highs, and the industry is struggling to recover from the impact of the naira volatility and high operating costs,” she said. “Imposing a new travel levy will only push more Nigerians to seek cheaper alternatives through neighboring countries like Ghana and Benin Republic.”

Similarly, spokesperson for the AON, Captain Roland Iyayi, argued that the government’s policy contradicts its stated goal of promoting local aviation and tourism. He warned that the additional levy could worsen the existing challenges facing airlines, including jet fuel shortages, multiple taxes, and high maintenance costs.

“Instead of introducing more levies, the government should be looking at reducing the number of taxes airlines already pay,” Iyayi said. “Operators currently pay over 35 different charges to various agencies. Adding a new one could cripple smaller airlines and force ticket prices beyond the reach of average Nigerians.”

Public reaction has also been critical. Many Nigerians took to social media to express anger over what they see as another attempt to exploit travelers amid rising inflation and declining purchasing power. Critics say the move contradicts the government’s commitment to easing the cost of living and supporting the middle class.

Civil society group BudgIT called for an immediate review of the plan, urging the government to conduct stakeholder consultations before implementation. “Aviation already contributes significantly to tax revenues. The introduction of another travel tax without transparency on how it will be managed is unfair and risks discouraging both domestic and foreign travel,” BudgIT said in a statement.

Industry experts estimate that the new tax could increase international ticket prices by as much as 10 to 15 percent, depending on the destination and airline. Travel agencies have also warned that the levy could trigger a decline in passenger traffic, reducing Nigeria’s foreign exchange earnings from tourism and air transport.

Economist Dr. Andrew Eke described the $1 billion target as overly ambitious and potentially harmful to Nigeria’s business environment. “While governments need to boost revenue, policies like this should not come at the expense of economic growth. Increasing taxes in a struggling sector will only discourage investment and reduce long-term revenue potential,” he said.

Meanwhile, the Ministry of Aviation and Aerospace Development has defended the decision, insisting that the funds will be used to upgrade airport infrastructure, improve passenger experience, and expand regional connectivity. A senior ministry official who spoke on condition of anonymity said: “Nigeria’s aviation infrastructure is outdated. We need sustainable funding to compete globally. The travel tax will ensure consistent resources for modernization.”

Despite government assurances, several international airlines operating in Nigeria have expressed concerns about how the levy will be implemented and whether it complies with bilateral air service agreements (BASAs). A representative of a European carrier said: “If not properly managed, this could lead to disputes with partner countries or discourage airlines from expanding routes to Nigeria.”

In response to the backlash, Oyedele hinted that the government might review the structure and rate of the levy after consultations with key stakeholders. “We are open to dialogue. The goal is not to overburden travelers but to find a fair balance that benefits everyone,” he said.

The House of Representatives has also taken notice of the controversy, with lawmakers calling for a public hearing to assess the implications of the tax. The Chairman of the House Committee on Aviation, Nnolim Nnaji, said the committee would summon officials from the Ministry of Finance, FIRS, and the Aviation Ministry to explain the rationale behind the scheme.

As the debate continues, many observers believe that the government faces a delicate balancing act between raising much-needed revenue and maintaining a competitive, traveler-friendly aviation sector. If implemented without consensus, analysts warn, the $1 billion travel tax could backfire—reducing passenger numbers, hurting airline profitability, and slowing down tourism recovery.