IMF Pushes Nigeria to Tax Fuel, Telecoms to Shore Up Revenue

The International Monetary Fund has recommended that Nigeria's government implement new taxes on fuel products and telecommunications services as a means to strengthen public revenue collection. The recommendation was detailed in the fund's 2026 Article IV consultation report on Nigeria, released in June in Washington.

The proposal forms part of a broader fiscal strategy aimed at creating room in the budget for increased spending on social programmes. The IMF argues that the Nigerian government needs additional tax measures over the medium term, despite recent overhauls to the nation's tax system.

Specific proposals mentioned in the report include extending Value Added Tax to fuel products, introducing excise duties on telecommunications services, rationalising tax expenditures, and reducing existing VAT exemptions in the extractive industries and customs duties. The fund also suggests potential increases to the overall VAT rate as part of the revenue enhancement package.

Experts and analysts quoted by local media outlets have flagged concerns about the timing of these recommendations. They characterise the proposed measures as poorly timed given that Nigerians are already grappling with elevated cost of living and widespread economic hardship.

One university-based researcher noted that households are facing difficult conditions, which about the practical feasibility of introducing additional taxation at this juncture. The recommendations come after Nigeria implemented tax system reforms that the IMF assessment suggests may not be sufficient to sustain government spending plans over the coming years.

The fund's analysis indicates that further policy adjustments in taxation will likely be necessary to meet medium-term fiscal objectives and fund the administration's development and social intervention agenda.