IMF Recommends Fuel and Telecom Taxes for Nigeria

The International Monetary Fund (IMF) has advised the Nigerian government to introduce taxes on fuel products and telecommunications services as part of a broader strategy to increase government revenue and create fiscal space for social interventions. This recommendation is included in the IMF's 2026 Article IV consultation report for Nigeria.

The IMF argues that additional tax measures are necessary in the medium term, despite recent reforms to the country's tax system. Proposed changes include increasing the Value Added Tax (VAT) rate, extending VAT to fuel products, and rationalizing tax expenditures, particularly in the extractive industries.

The report warns that new taxes could exacerbate poverty and food insecurity, especially given the sensitivity surrounding fuel prices and telecom costs. Previous attempts to introduce a five percent excise duty on telecom services faced significant opposition and were eventually suspended.

The IMF estimates that Nigeria will need stronger revenue mobilization efforts to sustain plans for increased public spending to support vulnerable households.