The IMF recommends Nigeria's FG impose new fuel and telecom taxes

The International Monetary Fund (IMF) has strongly advised the Nigerian government to increase taxes and expand its revenue base to sustain social programs and public infrastructure.

The key tax measures proposed in the International Monetary Fund | IMF 2026 Article IV consultation report include 

Fuel Taxation, Extending the Value Added Tax (VAT) to petroleum products.                                   Telecom Services: Introducing excise duties on telecommunications services to capture more digital revenue.    

VAT Adjustments: Broadening the tax base and potentially increasing the overall VAT rate to boost the country's fiscal space

Poverty Safeguards: The IMF strongly warned that the timing of these new tax measures must consider the severe food insecurity and poverty currently faced by many Nigerians. They emphasized that any tax increase should be accompanied by fully funded cash transfer programs to protect the most vulnerable households.

Strong reforms over the past three years have yielded improved macroeconomic outcomes and built resilience. Still, conditions for many Nigerians remain difficult. Poverty reached 63 percent (national poverty line) and 27 million Nigerians are estimated to have faced food insecurity in the fall of 2025.

Higher global fuel, food and fertilizer prices will improve exports and fiscal revenues, but also give rise to inflationary pressures, potentially aggravating poverty and food insecurity. Growth is estimated at 4 percent in 2025 and projected at 4.1 percent in 2026, as headwinds from higher food and transport costs weigh on economic activity. After being on a declining trend for over a year, inflation nudged up to 15.4 percent year-on-year in March 2026 as the jump in international fuel and food prices started hitting Nigeria. While the external shock to fuel and food prices will push up inflation in the short run, the disinflation path is projected to continue in the second half of the year.

Risks to the outlook come from the uncertain global environment, in particular the outlook for fuel and food prices. The domestic security situation is another risk to people and economic activity. On the upside, quick gains on revenue mobilization would create additional budget space for growth-enhancing priority spending.