The International Monetary Fund (IMF) has advised Nigeria to look into introducing additional taxes on fuel products and telecommunications services as part of efforts to increase government revenue and strengthen fiscal stability.
In its 2026 Article IV Consultation report on Nigeria, the IMF said that despite recent tax reforms, the country may still need further policy changes over the medium term to improve revenue generation.
It proposed options such as expanding Value Added Tax to cover fuel, raising VAT rates, introducing excise duties on telecom services, cutting down tax exemptions, and reviewing incentives given to some sectors, including oil and gas-related industries and imports.
The Fund, however, warned that any new tax measures should be carefully timed due to Nigeria’s current economic conditions. It noted that poverty levels and food insecurity remain high, and stressed the importance of having effective social support systems in place before implementing reforms.
The recommendation is likely to spark public debate, especially as similar proposals in the past faced strong resistance. Earlier attempts to introduce additional taxes on telecom services were suspended after backlash from operators and consumers, who argued that the sector was already heavily burdened.
Fuel tax-related proposals have also previously attracted criticism from labour groups and other stakeholders, particularly in the wake of subsidy removal and rising living costs.
The IMF estimated that a combination of new tax policies could significantly boost Nigeria’s revenue over time, projecting gains of nearly 3.9 percent of GDP within three years if fully implemented.
It also highlighted that improvements in tax administration—such as digital systems, better compliance tracking, and wider taxpayer registration—could further increase government earnings by reducing leakages and informal activity.
However, the Fund acknowledged that some recent tax relief measures may temporarily reduce revenue because they are aimed at supporting small businesses and low-income households.
Overall, the IMF said Nigeria could still achieve a net revenue increase in the medium term if reforms are effectively implemented alongside stronger administrative systems.
