Federal Government yet to adopt recommendations as Nigerians raise concerns over cost of living and subsidy removal fallout

The International Monetary Fund (IMF) has advised the Federal Government in Abuja to introduce new taxes on fuel and telecommunications services as part of measures to boost revenue, according to its latest economic assessment released this week. The proposals, which include extending Value Added Tax (VAT) to petrol and imposing excise duties on mobile calls and data, have sparked debate nationwide as at Friday.

According to the IMF’s report, Nigeria’s government revenue remains among the lowest globally relative to GDP. The global lender recommended several steps: applying VAT on petrol and other petroleum products, introducing excise taxes on telecom services such as calls and data, gradually increasing VAT rates over time, and reducing certain tax exemptions and customs waivers. The IMF said these measures would help fund critical sectors like infrastructure, healthcare, and education while reducing government borrowing.

The recommendations come at a time when many Nigerians are struggling with high inflation, rising food prices, and reduced purchasing power following the removal of fuel subsidy and recent currency reforms. Any new tax on fuel is expected to drive up transportation costs for both commuters and businesses across states like Lagos, Kano, Rivers, and beyond. Experts warn this could lead to a further spike in prices of essential goods due to higher logistics costs.

Millions also depend on mobile phones for communication, business, and education. Additional excise duties on telecom services could increase the cost of airtime, voice calls, SMS, and data plans—an issue that has drawn concern from civil society groups and economists alike. Dr. Aisha Yusuf of the Nigerian Economic Society said during a phone interview that “any new tax regime must consider the current hardship faced by ordinary citizens before implementation.” As at Friday evening, the Federal Ministry of Finance had not issued an official statement on whether it would adopt any of the IMF’s advice.

While the IMF recommendations remain non-binding advice for now—the final decision rests with the Federal Government and National Assembly—public debate continues amid fears that such measures may worsen living conditions for many Nigerians already affected by economic reforms. Whether policymakers will adopt all or part of these proposals remains uncertain.

Source: https://www.pulse.ng/story/imf-nigeria-tax-recommendations-fuel-telecom-2026061511165832725