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

Published

5 months ago

June 14, 2026

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.

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.

News

President Tinubu Departs Jeddah for Abuja After Completing Umrah

Published

8 hours ago

November 4, 2026

Nigerian Tracker

By Yusuf Danjuma Yunusa

President Bola Ahmed Tinubu, on Wednesday, departed from King Abdulaziz International Airport in Jeddah, Saudi Arabia, for Abuja, following the successful completion of his Umrah pilgrimage in the holy city of Makkah.

Accompanying Mr Tinubu to the airport were the Deputy Governor of the Makkah Region, Saud bin Mishaal bin Abdulaziz Al Saud; Nigeria’s Ambassador to Saudi Arabia, Yakubu Gambo and the Consul-General, Muazam Ibrahim Nayaya.

Before Mr Tinubu’s departure, he had a brief meeting with Mr Mishaal bin Abdulaziz Al Saud at the Royal Guest Palace at the airport.

While in Saudi Arabia, Mr Tinubu, alongside members of the Nigerian delegation, performed the Umrah rites, including circumambulating the Holy Ka’aba. On Sunday, Mr Tinubu was granted the rare privilege of entering the sacred structure, where he and members of his delegation performed two raka’at prayers.

Mr Tinubu expressed his gratitude to the Custodian of the Two Holy Mosques, King Salman bin Abdulaziz Al Saud and Crown Prince Mohammed bin Salman for the special courtesies and hospitality extended to him and the Nigerian delegation, particularly the privilege of accessing the Holy Ka’aba to offer prayers.

Members of Bola Ahmed Tinubu, on Wednesday, departed from King Abdulaziz International Airport in Jeddah, Saudi Arabia, for Abuja, following the successful entourage included the National Security Adviser, Nuhu Ribadu, and the governors of Sokoto, Jigawa, Kaduna, Borno and Yobe states, among others.

News

2027: Atiku Kicks off Campaign in Sokoto

Published

9 hours ago

November 4, 2026

Nigerian Tracker

By Yusuf Danjuma Yunusa

The African Democratic Congress (ADC) kicked off its presidential campaign rally for the 2027 presidential election in Sokoto State on Wednesday with crowd welcoming the party’s presidential candidate, Atiku Abubakar.

The party said thousands of supporters lined the route from Sultan Muhammad III International Airport to its state secretariat, where Atiku’s campaign rally was held.

In a statement issued on Wednesday, Phrank Shaibu, Director of Strategic Communication of the ADC Presidential Campaign Council, said the former vice president’s motorcade took about three and a half hours to reach the rally venue due to the large turnout.

He said residents, including youths, women and elderly people, abandoned their businesses and other daily activities to join the procession and welcome the ADC candidate.

The campaign council described the turnout as spontaneous, dismissing suggestions that the crowd was mobilised through financial inducements.

It said the reception demonstrated growing support for Atiku’s promise to address the economic difficulties facing Nigerians, particularly the rising costs of food, transportation, fuel and other essential commodities.Nigeria travel guide

The ADC also accused the Sokoto State Government of frustrating its campaign activities by denying the party access to public facilities requested for the rally.

According to the campaign council, the alleged restrictions did not discourage supporters but rather heightened public resentment and strengthened the party’s mobilisation.

“The federal government and its APC allies should understand that denying people a venue cannot suppress their political choices. In Sokoto, those efforts backfired: the people came out in even greater numbers and made their voices heard,” the statement said.

At the rally, Atiku reiterated his commitment to addressing the cost-of-living crisis and restoring economic stability for households and businesses, according to the campaign council.

The former vice president proposed a targeted, production-based subsidy for qualifying petroleum products refined locally as part of his economic agenda.

The council said the proposed policy would link government support to domestic production, reduce fuel costs and ease the impact of high transportation and energy expenses on food prices and household budgets.

It said the proposal was designed to encourage local production while providing relief to Nigerians struggling with the removal of petroleum subsidy.Nigeria travel guide

The campaign council maintained that the ADC’s economic agenda was centred on making essential goods and services affordable, supporting local industries and addressing the hardship experienced by ordinary Nigerians.

“When you have a message that connects with the people, you do not need to rent a crowd. The people show up on their own,” Mr Shaibu said.

News

Abdul El-Sayed Becomes First Muslim Senator in U.S.

Published

9 hours ago

November 4, 2026

Nigerian Tracker

By Yusuf Danjuma Yunusa

Abdul El-Sayed, a Democrat, has become the first Muslim senator in the U.S. after securing 2.2 million votes in Michigan, about 52 per cent, to defeat Republican candidate Mike Rogers and Libertarian Lydia Christensen.

Mr El-Sayed, 42, an immigrant born to Egyptian parents, fought a hard-won victory given his candidacy was highly scrutinised over his ties to Islam and open rebuke of Israel.

Results showed Mr El-Sayed led with 52 per cent, the GOP candidate scored 46.1 per cent, and Ms Christensen got one per cent of total votes cast.

Mr El-Sayed’s candidacy struggled after Haley Stevens, a Democratic candidate he defeated in the primary, withdrew her support two days before the midterm polls.

Mrs Stevens endorsed the Republican candidate, saying she could no longer support Mr El-Sayed over what she described as anti-semitism. She asked Mr El-Sayed to condemn an advertisement promoting his candidacy, which blamed U.S. support for Israel for rising cost of goods and the war in Iran.

Mr El-Sayed declined and publicly uninvited her from a joint appearance they were scheduled to have in Detroit. Ms Stevens withdrew her support two nights before the election.

The move stunned Democrats who viewed her actions as a betrayal to the party. But her clout appeared limited with Mr El-Sayed’s victory at the polls.

Former President Barack Obama campaigned for Mr El-Sayed in Michigan, a presidential battleground where President Donald Trump won by 1.4 points to defeat Kamala Harris in November 2024.

Senator Gary Peters, the incumbent Michigan senator, will retire after his term expires in January, when Mr El-Sayed is scheduled to be sworn in.