Nigerians Reject IMF Proposal for Fuel and Telecom Taxes Amid Rising Cost of Living Concerns

Nigerians have strongly pushed back against a recommendation by the International Monetary Fund (IMF) urging the Federal Government to introduce new taxes on telecommunications services and fuel products as part of broader efforts to boost government revenue.

The proposal, contained in the IMF’s latest Article IV Consultation Report on Nigeria, has sparked criticism from consumers, industry stakeholders, and telecommunications subscribers who argue that additional taxes would further increase the financial burden on citizens already grappling with high living costs.

According to the IMF, Nigeria may need to implement additional tax reforms over the medium term to strengthen public finances, create fiscal space for infrastructure development, and support social intervention programmes. The global financial institution noted that while recently enacted tax reforms are expected to improve revenue collection, they may not be sufficient to meet the country’s growing expenditure needs.

As part of its recommendations, the IMF suggested the introduction of excise duties on telecommunications services and the extension of Value Added Tax (VAT) to fuel products. The organization believes these measures could help expand government revenue and improve fiscal sustainability.

However, the proposal has been met with strong opposition from telecommunications subscribers and industry representatives. The President of the National Association of Telecom Subscribers of Nigeria (NATCOMS), Deolu Ogunbanjo, criticized the recommendation, arguing that the telecommunications sector is already heavily taxed and should not be subjected to additional levies.

Ogunbanjo stated that telecom operators and subscribers currently face more than 40 different taxes, charges, and regulatory fees. He maintained that imposing new excise duties would further increase the cost of communication services for millions of Nigerians who rely on mobile phones and internet access for business, education, and daily activities.

He also recalled previous efforts by the government to introduce a five percent excise duty on telecommunications services, a policy that was widely opposed by stakeholders. According to him, subscriber groups challenged the measure in court and secured legal action against its implementation.

The Federal Government eventually suspended the proposed telecom excise duty in an effort to reduce financial pressure on consumers and support digital inclusion. The tax had originally been introduced in 2022 under the administration of former President Muhammadu Buhari as part of efforts to increase non-oil revenue generation.

While advocating for stronger revenue collection, the IMF acknowledged the economic realities facing many Nigerians. The organization warned that any future tax measures should be carefully timed to avoid worsening poverty levels and food insecurity. It advised the government to strengthen social protection systems, particularly cash transfer programmes, before implementing policies that could further increase the cost of living.

The IMF also emphasized the need for greater use of digital technology in tax administration, arguing that improved digital systems could help reduce leakages, improve compliance, and tackle corruption within the revenue collection process.

According to the report, technology-driven reforms could significantly improve tax efficiency and help Nigeria maximize existing revenue sources without placing excessive pressure on taxpayers. The IMF noted that it continues to provide technical support to Nigerian authorities on tax administration and customs reforms through specialized advisory programmes.

The debate over new taxes comes at a time when many Nigerians are already facing rising prices across essential sectors, including food, transportation, housing, healthcare, and telecommunications. As a result, proposals for additional levies are being viewed by many as potentially harmful to economic recovery and household welfare.

For subscribers and consumer advocates, the concern extends beyond taxation itself. They argue that affordable telecommunications services have become a necessity in modern society and that imposing additional charges could hinder digital access, innovation, and economic participation.

As discussions continue, attention is likely to remain focused on how the government balances its revenue generation goals with the need to protect citizens from further economic hardship. The outcome of this debate could have significant implications for both Nigeria’s fiscal policy direction and the affordability of essential services in the years ahead.