Connect with us

News

IMF Recommends New Taxes on Fuel Products, Telecom Services in Nigeria

Published

4 months ago

on

 

By Yusuf Danjuma Yunusa

The International Monetary Fund has recommended introducing taxes on fuel products and telecommunications services in Nigeria as part of broader measures to increase government revenue and create fiscal space for development spending and social interventions.

The recommendation was contained in the IMF’s 2026 Article IV Consultation report on Nigeria, where the Fund argued that additional tax measures would be needed over the medium term despite the recent overhaul of the country’s tax system.

“Further tax policy changes will likely be needed—such as increasing the VAT rate, extending VAT to fuel products, rationalising tax expenditures in particular VAT exemptions on extractive industries and some customs duties, and introducing telecom excises—to complement administrative gains,” the IMF said.

The Washington-based institution, however, cautioned that the timing of any new taxes must take into account Nigeria’s rising poverty levels and worsening food insecurity.

“The timing of reforms must consider the poverty and food insecurity situation and ensure that the cash transfer system is in place and funded,” the Fund added.

The recommendation is likely to trigger fresh debate across the country, given the sensitivity surrounding fuel prices and telecommunications costs.

A previous attempt by the Federal Government to introduce a five per cent excise duty on telecom services faced widespread opposition from operators, subscribers and consumer advocacy groups before it was eventually suspended and later scrapped.

Telecommunications companies had argued that the sector was already burdened by multiple taxes, rising energy costs, foreign exchange pressures and infrastructure challenges, warning that any additional levy would ultimately be passed on to consumers through higher call and data charges.

Advert

Similarly, proposals linked to fuel taxation have generated opposition from labour unions and private sector groups amid concerns over rising living costs following the removal of petrol subsidies and increases in transport and food prices.

The IMF’s latest recommendation comes as it projects that Nigeria will need stronger revenue mobilisation efforts to sustain planned increases in public spending and support vulnerable households.

According to the report, revenue-enhancing tax policies could generate additional revenues equivalent to 3.9 per cent of Gross Domestic Product within three years of implementation. The Fund identified a two-percentage-point increase in the Value Added Tax rate as the single largest contributor, with an estimated revenue gain of 0.8 per cent of GDP.

It also projected that removing pioneer status incentives and revising free zone regulations would generate another 0.7 per cent of GDP, while reforms to capital gains taxation and adjustments to personal income tax bands, allowances and rates would each contribute 0.6 per cent of GDP.

The IMF further estimated that a top-up tax on multinationals and large firms could raise 0.5 per cent of GDP, while rationalising investment allowances would add another 0.4 per cent.

Notably, the category labelled “others”, which includes telecom excise duties and other measures such as a carbon tax on fuel, was projected to contribute an additional 0.4 per cent of GDP in revenue gains.

Beyond new tax measures, the Fund said Nigeria could generate even larger gains through stronger tax administration.

It projected that administrative reforms would yield an additional 3.1 per cent of GDP through improved compliance, enforcement and efforts to reduce informality in the economy.

According to the report, measures such as fiscalisation, electronic invoicing and cross-validation of tax deductions could generate 1.5 per cent of GDP, while expanded tax identification registration and consolidation of taxpayer databases could contribute another 1.6 per cent of GDP.

The IMF acknowledged that some of Nigeria’s recently enacted tax reforms would reduce government revenue in the short term because they were designed to support households and small businesses.

It estimated that revenue-reducing measures would lower revenues by 2.4 per cent of GDP, with expanded VAT input credits, additional zero-rated items and broader exemptions on basic consumption goods accounting for 1.7 percentage points.

Lower corporate income tax obligations for smaller firms would reduce revenues by 0.4 per cent of GDP, while lower personal income tax rates and expanded exemptions for low-income earners would account for another 0.3 percentage point reduction.

Related Topics:

News

EFCC Reopens Atiku’s Alleged Financial Crimes Probe

Published

11 hours ago

on

October 15, 2026

By

 

By Yusuf Danjuma Yunusa

The Economic and Financial Crimes Commission (EFCC) has reopened its investigation into allegations against former Vice President Atiku Abubakar following a petition by former House of Representatives member, Hon. Ehiozuwa Johnson Agbonayinma, seeking his prosecution over alleged financial crimes.

The petition seeks to revive a case dating back to 2006, asking the anti-graft agency to revisit its investigation under former chairman, Mallam Nuhu Ribadu, and consider a subsequent report by a United States Senate subcommittee.

Speaking on the development, Agbonayinma said the EFCC had acknowledged his petition, dated August 27, 2026, and received on September 1. Filed through his lawyer, Chief Hannibal Egbe Uwaifo, SAN, the petition asks the commission to reactivate its earlier report and act on the allegations.

Advert

The former lawmaker appeared at the EFCC headquarters in Jabi, Abuja, where he adopted the petition and answered questions from investigators.

Agbonayinma said the matter should not be allowed to remain unresolved.

“I want to thank Nigerians, the EFCC, and those praying for me in this struggle. The laws are meant for both the rich and the poor. After the EFCC has done a fantastic job, it should not be kept under the table,” he said.

In the petition, Agbonayinma urged the EFCC to revisit its September 2006 report on Atiku and a February 4, 2010, report by the US Senate Permanent Subcommittee on Investigations, arguing that both documents should form the basis for renewed action.

The petition alleged that the EFCC had previously indicated that Atiku could face prosecution after leaving office as vice-president, when his constitutional immunity ceased to apply, but that no prosecution followed.

Agbonayinma described the alleged failure to act as a dereliction of duty and argued that pursuing the matter would demonstrate the commission’s resolve to hold politically influential figures accountable.

He also disclosed that he had petitioned US President Donald Trump over the allegations.

The EFCC spokesman, Dele Oyewale, had yet to respond to messages seeking an update on the investigation as of the time of filing this report.

Continue Reading

News

APC Presidential Campaign Council: Nigerians Devoid Of Party Affiliations Endorses Tinubu’s 2nd Term-Kwankwaso

Published

12 hours ago

on

October 15, 2026

By

 

From Muhammad Kabir Kano

The Collection of Nigerians of different Political Parties that openly not only attended the inauguration of the APC Presidential Campaign Council, Wednesday, clearly shows that President Tinubu today is been accepted by all and sundry, regardless of Party Affiliations.

Making this submission, a member of the Presidential Campaign Council, and who is the Director Finance Hadejia Jammaare River Basin, Musa Illiyasu Kwankwaso, said that, from APGA, to Labour Party and others who were introduced, all firmly stands with Tinubu continuity in office.

Kwankwaso, said that remarks of Men of proven integrity likes Chukuma Charles Soludo the Governor of Anambara State and others, they said it all that President Tinubu Economic blueprint is a masterpiece that only Economic gurus and those who are awake to global economic realities will appreciate.

Advert

“It has never happened in the political Nigerian history that one Man attract collection of nearly all opposition Parties not only Opposition Politicians but those who have never agreed to sit together, but because Tinubu they accepted to come onboard and pursued his common goal”.

Dr Musa Illiyasu Kwankwaso, notes that, today the issues at stake is not about Tinubu’s reelection alone but the prosperity of Nigeria, which despite the difficulties, President Tinubu accepted to uphold and ensure it’s total achievement.

He said, “to me the inauguration of the Campaign Council is just like a congregation of celebration of the reelection of President Tinubu back to office, because what else remains, the same Nigerians that we will campaign for, have collectively came forward themselves in unison for one Person(Tinubu).

Musa Illiyasu Kwankwaso, who assured that just like what it is obtained at the National levels, the same things will be done in Kano and other states, adding that the open recognition of Governor Abba Kabir Yusuf by the President and his symbolic Cap shows a clear victory for the Governor Yusuf/Murtala Sule Garo his Deputy.

“One will agree with me that Governor Yusuf, Senator Barau Jibrin, House of Representatives Committee Chairman on Appropriation Abubakar Kabir Abubakar Bichi, Alhassan Ado Doguwa, Abdulmumini Jibrin Kofa, Senator Kawu Sumaila, Senator Mallam Ibrahim Shekarau, Honorable Alhassan Rirum, and all other contestants including our Father former National Chairman of APC, Dr Umar Abdullahi Ganduje are working in tandem for the President Tinubu/ Governor Yusuf/Garo 2 term bids”.

Kwankwaso, assured that before noon, they will bring forward the entire Northern Nigeria votes for Tinubu.

Continue Reading

News

IMF to Nigeria: Don’t Bring Back Petrol Subsidy for Everyone, Help the Poor Instead

Published

1 day ago

on

October 14, 2026

By

 

 

By Yusuf Danjuma Yunusa

The International Monetary Fund (IMF) has advised Nigeria against restoring broad petrol subsidy, recommending targeted support for vulnerable households to cushion the impact of rising energy costs.

IMF said blanket petrol subsidies were expensive, often benefited higher-income consumers disproportionately and could worsen fiscal pressures amid rising borrowing costs.

Rodrigo Valdés, director of the IMF’s fiscal affairs department, spoke during a press briefing on the fund’s fiscal monitor at the 2026 annual meetings of the IMF and World Bank in Bangkok, Thailand, on Wednesday.

His comments followed a question on how the fund could recommend allowing energy prices to reflect scarcity when higher fuel prices in Nigeria could raise transport costs, worsen inflation and deepen poverty, particularly when the government was facing calls to restore petrol subsidy ahead of an election year.

“Protecting people is not the same as protecting the price of fuels,” Valdés said.

He said fuel subsidies or measures preventing prices from adjusting fully to an energy shock had cost countries between 1 percent and 1.5 percent of gross domestic product (GDP) in 2026.

Advert

“It’s first fiscally very costly, and second, if you look at the pattern of consumption, it’s easy to see that that subsidy is readily regressive in many places,” he said.

Valdés said governments should instead use social safety nets and household data to identify people who need assistance.

“There are better tools to deal with this,” he said.

The federal government recently announced a 30-day petrol discount at Nigerian National Petroleum Company (NNPC) Limited retail stations, with priority for public transport operators, to cushion the impact of rising fuel prices.

Taiwo Oyedele, minister of finance, said NNPC retail would sell petrol at cost by foregoing its retail profit margin, describing the measure as temporary relief rather than a return to petrol subsidy.

The government also proposed negotiating a ceiling of N1,350 per litre on petrol’s ex-gantry or landing cost, subject to monthly reviews.

The IMF also recommended targeted interventions to cushion the effect of higher fuel prices on transportation costs.

Davide Furceri, a division chief in the fund’s fiscal affairs department, said governments could redirect some of the resources spent on blanket subsidies towards vulnerable consumers.

“For example, you mentioned transportation costs. Yeah, gasoline could go up, and perhaps bus fees may be subsidised in a way that is a much better policy at the end of the day than just a blanket subsidy for everybody,” Furceri said.

He also suggested alternatives such as school feeding programmes, geographical targeting and assistance for vulnerable farmers.

Furceri acknowledged that some countries lacked household registries and digital payment systems needed to deliver targeted support effectively.

However, he said governments could adopt alternative approaches in the short term while developing stronger systems.

He recommended that assistance should be limited, targeted and temporary.

Valdés explained that fuel subsidies could worsen global energy pressures by preventing demand from adjusting when supplies were constrained.

“When you subsidise, you don’t allow, at the end of the day, demand to adjust,” he said.

“And reality is that we have less fuels in the world economy. That means that someone else has to adjust more, and the market produces a higher price for that.”

The IMF official said subsidies were not only costly and regressive but could also have spillover effects on the global economy.

Continue Reading

Trending