NCAA summons Overland Airways over VAT charged on tickets purchased in 2025, as new 2026 tax laws take effect
The Nigerian Civil Aviation Authority (NCAA) has summoned Overland Airways over a dispute regarding value-added tax (VAT) charged on tickets purchased in 2025, The Cable reports.
The action follows a passenger complaint on X alleging that her 86-year-old grandmother was asked to pay an additional N11,286 in VAT for a ticket bought before the new tax regime took effect.
Airlines were previously exempt from VAT, but new laws implemented by the Nigeria Revenue Service (NRS) came into force on 1 January 2026.
Michael Achimugu, NCAA’s director of public affairs and consumer protection, stated that a meeting was held with Overland Airways to hear the airline’s explanation.
Attendees included NCAA directors of consumer protection and air transport regulations, officials from flight operations and adjudication, the general manager of policy and enforcement, and legal representatives from the authority.
Overland Airways argued that aviation taxes should apply when tickets are flown, not when purchased, and cited a standing understanding with the tax authority to that effect.
Achimugu said the NCAA maintained that any previous arrangement would be overridden by the new tax laws unless the NRS explicitly states otherwise.
“The airline’s argument is that tax in aviation is charged on the ticket flown, not when purchased. They claim to have a standing agreement with the tax body in this regard,” Achimugu explained. However, he noted that official clarification from the NRS is still required.
The NCAA has directed Overland Airways to seek formal guidance from the NRS on whether VAT can be applied retrospectively to tickets bought before 2026 but flown afterwards.
If the NRS confirms that pre-2026 tickets are exempt, the airline has agreed to refund affected passengers.
Overland Airways is expected to submit the NRS response to the NCAA within 10 days.
The dispute comes amid broader industry concerns that the new tax regime may increase airfares.
The CEO of Air Peace has warned that the changes could strain airline operations and urged government intervention to protect private operators.
