Nigerians Reject IMF Recommendation on Telecom, Fuel Taxes

The recommendation by the International Monetary Fund (IMF) that Nigeria consider imposing more taxes on telecommunications services and petroleum products has triggered widespread criticism from citizens and stakeholders across the country. The proposal, contained in the IMF’s latest Article IV Consultation Report on Nigeria, suggested the introduction of taxes on fuel products and telecommunications services as part of measures aimed at boosting government revenue and creating fiscal space for development projects and social interventions.

The recommendation immediately sparked public backlash, with many Nigerians citing previous experiences with IMF-backed policies and warning against additional financial burdens on citizens already struggling with economic hardship.

In response to concerns, the Federal Government clarified that the IMF’s recommendations do not constitute official policy and are not binding on Nigeria.

In a statement, the government stressed that any decision regarding taxation would be made through constitutional and legislative processes while taking into account national priorities and prevailing economic realities.

“The IMF Article IV Consultation Report contains the Fund’s assessment of Nigeria’s economy as well as recommendations for consideration by the authorities. Those recommendations do not amount to government policy and are not binding on Nigeria.

“Decisions on tax matters are taken through established constitutional and legislative processes and are guided by national priorities and prevailing economic realities,” the statement said.

Despite the government’s assurance, critics have continued to oppose the proposal, arguing that additional taxes would worsen economic conditions, hurt businesses and erase gains recorded under the current administration over the past three years.

Chairman of the Alliance for Economic Research and Ethics LTD/GTE, Dele Oye, described the proposed measures as insensitive, warning that they would further weaken businesses and increase hardship for more than 140 million Nigerians living in poverty.

According to Oye, Nigeria can improve revenue generation without imposing fresh taxes on households and businesses. He noted that tax revenue had already increased by over 180 per cent, rising from N10.1 trillion in 2022 to N28.3 trillion in 2025.

He argued that introducing new taxes on fuel and telecommunications at a time when millions of Nigerians are battling inflation, rising living costs and weak purchasing power would only intensify economic pressure.

Oye also pointed out that businesses are already burdened by what he termed hidden taxes, including expensive borrowing costs, unreliable electricity supply, multiple government levies, foreign exchange instability and security expenses.

He warned that commercial lending rates above 35 per cent and escalating energy costs have significantly raised operating expenses, adding that more taxes could discourage investment and slow economic growth.

Similarly, Lagos-based lawyer and tax expert Bolu Oyeniyi questioned the need for new taxes when improvements in tax administration could generate significant revenue. He cited the IMF’s own assessment that administrative reforms could yield gains comparable to those expected from new tax measures.

Oyeniyi urged the government to focus on strengthening tax compliance, reducing the cost of governance, blocking revenue leakages, expanding the formal economy and reviewing tax incentives granted to large corporations and extractive industries.

He also cautioned that taxing telecommunications services could undermine digital inclusion and financial innovation, while additional fuel taxes could increase transportation costs and push food prices even higher.

Calling for policies that support economic recovery, he advised the government to prioritise business growth and job creation rather than increasing the tax burden on citizens.

“The patient needs recovery time, not another surgery,” he said, urging the government to reject the IMF’s recommendations on telecom and fuel taxes and pursue reforms that expand the economy rather than deepen hardship.

Adding his voice to the debate, Lanre Adebowale, a civil servant with the Lagos State Ministry of Commerce, strongly criticised the IMF’s recommendation and advised the government against relying on further policy prescriptions from the international financial institution.

Adebowale recalled the IMF-backed policies introduced during the administration of former military ruler Gen. Ibrahim Babangida in 1986, arguing that they contributed significantly to Nigeria’s long-term economic challenges.

He said, “I remember very well how the Babangida government destroyed Nigeria through borrowing from the IMF. One of the conditions for getting the loan then was for the government to implement an economic policy called the 'Structural Adjustment Programmes' (SAP).

“This was the genesis of Nigeria’s economic crisis, which we are still struggling with to date.”

He further lamented that the programmes, which were intended to stabilise economies, reduce fiscal deficits and promote market-driven reforms, ultimately weakened Nigeria’s economy and caused hardship for citizens.

According to him, the policies led to currency devaluation, privatisation, cuts in public spending, market liberalisation and tax reforms.

“This was how state-owned enterprises like Nigeria Telecommunications Limited, NITEL, Nigeria Hotels, Nigeria Airways and a lot of other public companies which were the pride of Nigeria were sold at give-away prices to a few ‘connected’ individuals.

“It is the same IMF that has come again to recommend that our government should tax Nigerians again on petroleum products and telecommunications service. Remember that most household businesses have crumbled because there is no electricity, and the price of fuel to power the generators has gone far beyond the reach of ordinary people at above N1200 per litre of petrol.

“Also, remember that Nigerians pay the highest in data among other nations of the world, a development that is still generating public outcry.

“And here we are reading about a recommendation from the same IMF to increase taxes on these products and services.

“This is quite unfortunate, but the good news is that the government has come out to say it is not considering bringing more taxes on telecoms and petrol.

“That’s good enough, but going forward, I advise that Nigeria should not be listening to the IMF because it will always give advice that will favour it and not the advice that will favour Nigeria,” he stated.

The debate continues as Nigerians weigh the potential impact of additional taxes against the government's revenue-generation objectives, with many calling for alternative reforms that would expand economic opportunities without increasing the financial burden on citizens.