The International Monetary Fund (IMF) has recommended that Nigeria introduce new taxes on fuel products and telecommunications services as part of broader efforts to strengthen government revenue and create fiscal space for public spending and social welfare programmes.
The recommendation was contained in the IMF’s 2026 Article IV Consultation Report on Nigeria, where the Fund argued that recent tax reforms, while significant, may not be sufficient to meet the country’s long-term fiscal needs. According to the IMF, additional measures such as extending Value Added Tax (VAT) to fuel products, introducing telecom excise duties, and reviewing existing tax exemptions could help improve revenue generation.
The Fund noted that Nigeria’s increased capital expenditure ambitions and growing demand for social investments will require stronger revenue mobilisation over the medium term. It projected that revenue-enhancing tax policies could generate additional government income equivalent to 3.9% of GDP within three years if fully implemented.
Beyond new taxes, the IMF also highlighted the importance of improving tax administration through measures such as electronic invoicing, expanded taxpayer registration, and stronger compliance systems. The institution estimates that administrative reforms alone could contribute an additional 3.1% of GDP in revenue gains.
However, the IMF acknowledged the potential social impact of the proposed measures, particularly given Nigeria’s rising poverty levels and food insecurity challenges. The Fund stressed that any new tax policies should be carefully timed and supported by adequately funded social protection programmes, including cash transfer schemes for vulnerable households.
The recommendation is likely to spark debate among stakeholders, especially as previous attempts to introduce telecom excise duties faced strong opposition from operators, consumer groups, and subscribers. Industry players have consistently argued that additional taxes would ultimately be transferred to consumers through higher call and data charges. Similarly, proposals affecting fuel costs remain politically sensitive following the removal of fuel subsidies and the resulting increase in living costs.
While the IMF maintains that stronger revenue mobilisation is necessary to support Nigeria’s fiscal sustainability, the Federal Government has yet to indicate whether it will adopt the proposed fuel and telecom tax measures.
