Economy
Revenue: IMF asks FG to impose fuel, telecom taxes
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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.
Overall, the IMF projected that the combined impact of revenue-enhancing measures, administrative reforms and revenue-reducing policies would result in a net increase in government revenue equivalent to 4.6 per cent of GDP over the medium term.
The Fund argued that stronger revenue mobilisation had become increasingly important because Nigeria’s fiscal position remained under pressure despite recent reforms.
The Nigerian National Petroleum Company Limited, NNPCL, has increased the pump price of Premium Motor Spirit, PMS at its retail outlets for the second time in less than two days.
A market survey by DAILY POST showed that NNPCL raised its petrol price to N1,335 per litre on Wednesday from N1,270 per litre on Tuesday.
This means that the state-owned filling station increased its fuel price by N65 per litre.
The new price has been implemented at NNPCL filling stations in Wuse Zone 6 (Berger), Zone 4, and other outlets in Abuja and its environs.
Recall that on Tuesday, NNPCL increased its petrol pump price by N115 per litre to N1,270 per litre.
The latest increase comes amid continued petrol price volatility in the country’s downstream oil sector following Dangote Refinery’s resumption of the sale of refined petroleum products in U.S. dollars.
DAILY POST reports that crude oil prices rose by nearly 4 percent on Wednesday as airstrikes intensified in the Middle East.
The Nigerian Communications Commission has said Africa’s telecommunications regulators must overhaul traditional regulatory approaches to keep pace with rapid technological changes, warning that existing frameworks were no longer adequate for an industry increasingly driven by artificial intelligence, satellite services, cloud computing and digital public infrastructure.
The Executive Commissioner for Stakeholder Management at the NCC, Rimini Makama, stated this on Tuesday in Abuja during the Head of Regulators Roundtable held on the sidelines of the ongoing 7th Ordinary Session of the Conference Preparatory Committee of the African Telecommunications Union.
Makama said the telecommunications landscape had become significantly more complex, requiring regulators to rely on data and market intelligence rather than conventional regulatory methods.
“Our discussion today turns on one question that matters to every regulator in this room. How do we use data and evidence to make decisions that are smarter, more transparent, and more focused on our consumer? Our markets are no longer simple,” she said.
She added, “Broadband is expanding, satellite services are arriving, AI, cloud computing, and digital public infrastructure are reshaping our sector. The old regulatory approaches were built for a simpler time. They are no longer enough.”
According to her, regulators across Africa now possess unprecedented volumes of technical, market and consumer data, but the real challenge lies in converting that information into better regulatory decisions.
“To stay ahead of the problem and not just react to it, we need trusted intelligence,” Makama said.
She explained that because African digital markets were becoming increasingly interconnected, regulators faced similar responsibilities in protecting consumers, promoting competition, attracting investment and strengthening network resilience.
“The challenge is not collecting it. The challenge is turning it into better decisions,” she said.
Makama said the NCC had developed a regulatory intelligence ecosystem that integrates multiple data sources, including quality of service and quality of experience indicators, consumer complaints, compliance analytics and market intelligence to support evidence-based policymaking.
“It brings several data sources into one place, so that our decisions rest on evidence, quality of service, and quality of experience data, consumer complaints, compliance analytics, and market intelligence. We will walk you through some of the recent cases where this intelligence led to real and measurable outcomes,” she said.
She urged regulators across the continent to deepen collaboration by sharing practical experiences and developing trusted approaches to data verification, advanced analytics and consumer-focused regulation.
Makama also challenged participants to examine how regulators could ensure the independence and accuracy of regulatory data, remove barriers to information sharing and measure consumer experience beyond conventional quality-of-service metrics.
Earlier, the Executive Vice-Chairman of the NCC, Dr Aminu Maida, said African regulators were increasingly confronted with common challenges despite operating under different legal and institutional frameworks.
According to him, discussions among regulators now routinely revolve around investment, infrastructure resilience, satellite communications, cybersecurity, affordability, artificial intelligence and emerging technologies.
“We may regulate markets of different sizes, operate under different legal frameworks, and respond to different national priorities. But the realities of our work are often remarkably similar,” Maida said.
He added, “Someone asks, how are things back home? Five minutes later, we are discussing investment, infrastructure resilience, satellite services, cyber security, affordability, artificial intelligence, or the latest technology that has arrived just in time to test the regulatory framework we thought had finally settled.”
Maida said such shared experiences underscored the need for stronger collaboration among African regulators to avoid addressing similar problems independently.
“The challenge that one regulator is trying to solve has already been encountered in one form or another by a colleague elsewhere on the continent. So, the question really is how we make that exchange of experience more deliberate, more systematic, and more useful to our institutions,” he said.
He described the roundtable as an opportunity to strengthen evidence-based regulation by encouraging the use of data, market intelligence and practical experience in policymaking.
Also speaking, the Executive Commissioner, Technical Services, Sunday Oshadami, said the NCC had prioritised transparency by ensuring operators clearly understood regulatory obligations and by making key performance information available to subscribers.
He said the commission had also invested in satellite monitoring capabilities to strengthen oversight of satellite communications and improve regulatory compliance.
According to Oshadami, the commission had established facilities to monitor developments in satellite communications and continued to invest in standard monitoring solutions to support effective regulation as new technologies gain prominence.
The PUNCH earlier reported that stakeholders in Nigeria’s telecommunications sector on recently backed the Nigerian Communications Commission’s draft business rules for Mobile Virtual Network Operators, while urging the regulator to strengthen enforcement to resolve persistent operational and commercial disputes between MVNOs and Mobile Network Operators.
Governor of the Central Bank of Nigeria, Yemi Cardoso, says Nigeria’s foreign exchange reserves has presently risen to 52.52 billion dollars.
Cardoso said this on Tuesday in Abuja, while presenting a communique issued at the end of the 306th meeting of the apex bank’s Monetary Policy Committee (MPC).
The News Agency of Nigeria (NAN) reports that he had earlier announced the decision of the MPC to retain the Monetary Policy Rate (MPR) at 26.5 per cent.
The committee also retained the Standing Facilities Corridor around the MPR at +50/-450 basis points.
Cash Reserve Requirement (CRR) for Deposit Money Banks was retained at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent
According to Cardoso, gross external reserves rose to 52.52 billion dollars as of July 17, from 50.47 billion dollars
as at end-May.
He said that the rise was mainly as a result of receipts from crude oil-related taxes and third-party inflows.
“This is sufficient to finance approximately 11 months of imports of goods and services, surpassing the international benchmark of three months cover,” he said.
The CBN governor said that headline inflation (year-on-year) eased marginally to 15.91 per cent in June, from
15.93 per cent in May, ending the three consecutive months of uptick in price levels.
He said that the decline resulted from a decrease in the non-food component which offset the increase
in food inflation.
“Food inflation rose to 17.52 per cent in June, from 16.96 per cent in May, reflecting supply constraints.
“However, core inflation moderated to 15.92 per cent in June, from 16.82 per cent in May, largely on the back of exchange rate stability.
“Similarly, the 12-month average inflation rate sustained its decline to 17.63 per cent in June, from 18.36 per cent in May,’ ‘ he said.
He said that it marked the sixth month of consecutive moderation and reflected a slower pace of price increases over the medium term.’
According to him, on a month-on-month basis, headline inflation declined to 1.66 per cent in June from 1.75 per cent in May, driven by a slowdown in core inflation.
He said that real Gross Domestic Product (GDP) expanded by 3.89 per cent in the first quarter of 2026, compared with 4.07 per cent in the preceding period.
“This is largely driven by the resilience of the non-oil sector, which grew by 3.94 per cent, supported by improvements in telecommunications, financial services, trade, transportation, and other services sub-sectors.
“Oil sector GDP growth rate declined to 2.57 per cent in the first quarter of 2026 from 6.79 per cent in the fourth quarter
of 2025, due to the maintenance of oil facilities and installations.
“However, recent data showed improvement in economic activities as composite Purchasing Managers Index (PMI) rose to 50.1 index points in June from 49.6 index points in May,” Cardoso said.
He said that output growth was projected to remain resilient into 2026, anchored on the recent improvement in crude oil production, expansionary PMI and the positive impact of timely policy reforms.
“Inflation is projected to moderate further in the medium term on the back of continued stability in the foreign exchange market.
“This will also be due to lagged effect of previous monetary policy tightening and improved food supply conditions as the harvest season approaches,” he said.
He, however, said that the key risk to the outlook remained the severe and prolonged escalation of the
Middle East conflict.
“In the light of these considerations, the MPC reaffirmed its commitment to preserve price and financial system stability.
“The committee remains prepared to take appropriate policy measures guided by evolving macroeconomic conditions,” he said.
NAN
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