- Among the options suggested are expanding Value Added Tax (VAT) coverage to fuel products, increasing the VAT rate
- It stressed the need for adequate social protection measures, including well-funded cash transfer programmes
- Telecom companies have consistently argued that the sector already faces numerous financial pressures
The International Monetary Fund (IMF) has advised Nigeria to consider introducing new taxes on fuel and telecommunications services as part of efforts to strengthen government revenue and support long-term economic development.
Eko Hot Blog gathered that the recommendation was contained in the IMF’s 2026 Article IV Consultation Report on Nigeria, which assessed the country’s fiscal outlook and revenue prospects.
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According to the Fund, despite recent reforms to Nigeria’s tax system, additional measures may be necessary in the coming years to boost public finances.
Among the options suggested are expanding Value Added Tax (VAT) coverage to fuel products, increasing the VAT rate, reducing certain tax exemptions, and introducing excise duties on telecom services.
The IMF, however, cautioned that any new tax policies should be implemented carefully, given the country’s growing poverty levels and food security challenges.
It stressed the need for adequate social protection measures, including well-funded cash transfer programmes, before introducing additional burdens on citizens.
The proposals are expected to generate debate, particularly because previous attempts to impose taxes on telecommunications services faced strong resistance from consumers and industry operators.
Telecom companies have consistently argued that the sector already faces numerous financial pressures, including high operating costs, foreign exchange challenges, and multiple taxation. They warn that any new levy could eventually lead to higher costs for subscribers.
Likewise, suggestions involving fuel taxation may attract criticism from labour groups and businesses already grappling with the effects of subsidy removal and rising living expenses.
The IMF believes that stronger revenue mobilisation is essential to sustain government spending, fund social programmes, and improve economic stability.
Its projections indicate that a combination of tax policy adjustments and administrative reforms could significantly increase government revenue over the medium term.
The report also highlighted the importance of improving tax collection through measures such as electronic invoicing, broader taxpayer registration, enhanced compliance monitoring, and better integration of taxpayer databases.
While acknowledging that some recent tax reforms may temporarily reduce government earnings due to expanded exemptions and relief measures for households and small businesses, the Fund maintained that broader reforms would ultimately strengthen Nigeria’s fiscal position and support economic growth.
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