ABUJA, June 15 – The International Monetary Fund (IMF) has advised Nigeria to consider new tax measures, including excise duties on telecommunications services and the extension of Value Added Tax (VAT) to fuel products, as part of efforts to strengthen government revenue.
The recommendation was contained in the Fund’s latest Article IV consultation report on Nigeria, which noted that the country’s fiscal needs may outpace current revenue growth despite ongoing tax reforms.
According to the IMF, the implementation of Nigeria’s newly signed tax laws should gradually improve revenue collection. However, it said additional measures may still be needed over the medium term to create enough room for development spending and social programmes.
The Fund suggested options such as increasing the VAT rate, extending VAT to fuel products, reviewing certain tax exemptions and customs duty waivers, and reintroducing excise duties on telecom services.
At the same time, it cautioned that any new tax measures should be introduced carefully, given rising poverty levels and food insecurity across the country. It recommended that authorities put in place an effective and adequately funded cash transfer system before implementing policies that could increase living costs for vulnerable households.
The IMF also encouraged Nigeria to deepen the use of digital technology in tax administration to improve collection, reduce leakages and address corruption risks. It said the institution would continue supporting the country through technical assistance on tax and customs reforms.
Nigeria had previously scrapped a proposed five per cent excise duty on telecommunications services in 2024 after concerns from operators over the burden on businesses and consumers. Industry players had argued that the sector was already contending with multiple taxes, including the 7.5 per cent VAT and mandatory regulatory contributions.
The IMF estimated that Nigeria’s economy expanded by four per cent in 2025 and projected growth of 4.1 per cent in 2026, although inflation, rising transport costs and higher food prices remain key pressures on households and businesses.
