Nigerians Express Concern Over IMF‑Proposed Telecom and Petrol Taxes

The International Monetary Fund, IMF, has recommended that the Nigerian government impose additional taxes on telecommunication services and petroleum products, a proposal that has sparked strong reactions from citizens.

Earlier this year, the IMF suggested these taxes as part of a broader strategy to boost government revenue and create fiscal space for development spending and social interventions. The recommendations were included in its Article IV report on Nigeria.

Daily Post reports that the public response was spontaneous, reflecting past experiences with IMF interventions.

Although Nigeria has denied adopting or considering the new taxes proposed in the latest IMF Article IV Consultation Report, many Nigerians continue to oppose the recommendation.

The government issued a statement emphasizing that the IMF’s recommendations are not binding and should not be interpreted as official policy. It added that taxation decisions can only be made through constitutional and legislative processes, guided by national priorities and current 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,” the statement read. “Decisions on tax matters are taken through established constitutional and legislative processes and are guided by national priorities and prevailing economic realities.”

Some Nigerians believe that such taxes would cripple businesses and deepen hardship, erasing the economic gains the current government has made in the past three years.

Dele Oye, chairman of the Alliance for Economic Research and Ethics LTD/GTE, strongly opposed the negative impacts of the proposed taxes. He argued that the measures were insensitive and would further burden businesses and over 140 million poor Nigerians.

Oye noted that Nigeria has the capacity to grow its revenue without imposing additional taxes on struggling households and businesses, citing a 180 percent rise in tax collections from N10.1 trillion in 2022 to N28.3 trillion in 2025 over three years.

He warned that imposing fresh taxes on fuel and telecom services while an estimated 140 million Nigerians live below the poverty line would add to the burden on citizens already dealing with inflation, high living costs and weak purchasing power.

Oye said Nigerian businesses are already weighed down by hidden taxes, including high borrowing costs, unreliable electricity, multiple levies at different government levels, foreign‑exchange volatility and security‑related expenses.

He highlighted that commercial lending rates exceeding 35 percent and soaring energy costs have significantly increased the cost of doing business, warning that additional taxes could discourage investment and slow economic growth.

Bolu Oyeniyi, a Lagos lawyer with expertise in tax matters, questioned the rationale for new taxes when improvements in tax administration could generate substantial additional revenue. He cited the IMF’s own assessment that administrative reforms alone could deliver gains comparable to those expected from new tax measures.

Oyeniyi urged the federal government to strengthen tax compliance, reduce governance costs, eliminate revenue leakages, formalise more of the informal economy and review tax incentives enjoyed by large corporations and extractive industries.

He warned that taxing telecommunications would undermine digital inclusion and financial innovation, while additional fuel taxes could ripple through the economy by increasing transport costs and driving up food prices.

Oyeniyi urged the government to prioritise economic recovery over new taxation and focus on creating an environment that enables businesses to grow and create jobs rather than placing additional burdens on consumers and entrepreneurs.

“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.

Lanre Adebowale, a civil servant with the Lagos State Ministry of Commerce, also condemned the IMF’s recommendation, warning the government against accepting further advice from the international monetary agency.

He recalled how the same IMF’s advice in 1986 to the military government of Gen. Ibrahim Babangida led Nigeria into a serious economic quagmire that it has struggled to escape.

“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 Programme (SAP). This was the genesis of Nigeria’s economic crisis, which we are still struggling with to date,” he stated.

He lamented that programmes designed to stabilise troubled economies, shrink government deficits and transition nations toward market‑driven, globally competitive systems ended up destroying Nigeria’s economy and inflicting grievous pains on Nigerians.

The core components of the programmes, according to him, included currency devaluation, privatization, 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 many other public companies that were the pride of Nigeria were sold at give‑away prices to a few ‘connected’ individuals,” he said.

“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 liter 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 one that will favour Nigeria,” he added.