ABUJA — The International Monetary Fund (IMF) has faced a wave of public and industry backlash in Nigeria following its recent recommendation that the Federal Government introduce excise duties on telecommunications services and extend Value-Added Tax (VAT) to fuel products.
The advice, contained in the IMF’s 2026 Article IV Consultation report, suggests these measures are necessary to widen the tax net and create fiscal space for development spending. However, the proposal has been met with firm rejection from subscribers and business advocacy groups, who argue that both sectors are already operating under unsustainable tax burdens.
Industry Leaders Push Back
Deolu Ogunbanjo, President of the National Association of Telecom Subscribers of Nigeria (NATCOMs), led the opposition, stating that the IMF’s recommendation demonstrates a fundamental misunderstanding of the realities on the ground.
“The telecom sector already faces over 40 different types of taxes,” Ogunbanjo stated, noting that the association had previously secured court injunctions to block attempts to impose a five per cent excise duty on the sector. Industry stakeholders, including the Association of Licensed Telecom Operators of Nigeria (ALTON), have consistently warned that any additional levies would be passed directly to subscribers, potentially pricing low-income Nigerians out of the digital economy.
Macroeconomic Gains vs. Household Hardship
While the IMF commended the Nigerian government’s economic reforms over the past three years for fostering greater stability and investor confidence, it acknowledged that the benefits have yet to reach ordinary citizens. The Fund noted that poverty and food insecurity remain severe, with the current external environment likely to exacerbate hardship.
Dr. Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), acknowledged the IMF’s positive assessment of Nigeria’s macroeconomic stabilization but cautioned that the focus must shift. “The challenge before policymakers is no longer economic stabilization, but one of inclusive prosperity,” Yusuf said, emphasizing that reforms must be measured by their ability to improve welfare, lower prices, and create jobs.
The IMF’s Stance
Despite the backlash, the IMF maintains that robust tax policy is critical for Nigeria’s long-term sustainability.The Fund stressed that any new taxes must be carefully sequenced, advising the government to ensure that effective, well-funded cash transfer systems are fully operational before implementing measures that could further squeeze the purchasing power of vulnerable households.
The organization continues to provide technical assistance to Nigeria, focusing on digitizing revenue administration to curb corruption and reduce leakages in the tax system.
