IMF Urges Nigeria to Implement VAT on Fuel Products

The International Monetary Fund (IMF) has recommended that the Nigerian government extend Value Added Tax (VAT) to fuel products and introduce excise duties on telecommunications services to increase government revenue and fund social development. This advice was part of the IMF's 2026 Article IV consultation report released on June 9.

Prof. Uvh Uwalek, Director of the Institute of Capital Market Studies at Nasarawa University, noted that while enhancing revenue mobilization is essential, the timing of such measures raises legitimate concerns due to Nigeria's current cost of living crisis. Households are already facing high food, transport, and energy costs, which could be exacerbated by additional indirect taxes.

Dr. Umar Yakubu, Executive Director of the Center for Fiscal Transparency and Public Integrity, emphasized that the focus should not solely be on revenue generation but also on addressing social challenges and poverty reduction. The IMF's recommendations include increasing VAT rates, extending VAT to fuel products, and rationalizing tax expenditures.