The International Monetary Fund (IMF) has renewed calls for Nigeria to introduce excise duties on telecommunications services, and expand VAT coverage to fuel products, arguing that the measures could strengthen government revenue and support long-term economic development.
In its 2026 Article IV Consultation report on Nigeria, the IMF said additional tax reforms would be required over the medium term, despite the country’s recent tax overhaul.
The Fund noted that stronger revenue collection is necessary to sustain public spending, finance social interventions and support economic reforms.
For the technology sector, the recommendation revives a contentious debate over taxing telecom services, which form the backbone of Nigeria’s digital economy. Industry stakeholders have previously warned that additional taxes could increase the cost of digital services and slow efforts to expand connectivity and digital transformation.
Previous plans to impose an excise duty of 5% on telecom services faced strong opposition from operators and consumer groups before being suspended.
The IMF proposal comes months after operators implemented a 50% tariff increase, citing rising operating costs driven by inflation, foreign exchange volatility and energy expenses.
According to the IMF, introducing excise duties on telecoms should form part of a broader package of reforms that includes raising VAT rates, reducing tax exemptions and improving compliance.
The Fund estimates that revenue-enhancing measures could generate an additional 3.9% of Gross Domestic Product (GDP) within three years, with telecom excises and related measures contributing 0.4% of GDP.
Beyond new taxes, the IMF identified digital technology as a critical tool for improving revenue collection. It urged authorities to deepen the use of electronic invoicing, fiscalisation systems and integrated taxpayer databases to reduce leakages and improve compliance.
The Fund projected that administrative reforms driven by digitalisation could generate an additional 3.1% of GDP through stronger enforcement and more efficient tax collection.
While advocating new revenue measures, the IMF cautioned that reforms must be carefully sequenced to avoid worsening poverty and food insecurity, stressing that effective social protection mechanisms should be in place before any additional tax burden is introduced.
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