The Nigerian people have reacted angrily to the International Monetary Fund’s (IMF) recommendation that the government impose higher taxes on petroleum products and telecommunication services.
Recall that as part of larger initiatives to boost government revenue and free up funds for social interventions and development spending, the IMF recently suggested imposing taxes on fuel products and telecommunications services in Nigeria.
Its Article IV report on Nigeria included this information.
According to the DAILY POST, the subsequent reactions were impulsive because of prior IMF encounters.
Nigerians have continued to voice opposition to the recommendations in the most recent IMF Article IV Consultation Report on Nigeria, despite Nigeria’s denial of reports that it had adopted or was considering the introduction of new taxes on petroleum products and telecommunications services.
In a statement, the government emphasised that the IMF report’s recommendations were not legally binding on Nigeria and should not be taken as official government policy.
It insisted that only constitutional and legislative procedures could be used to make taxation decisions, which would then be influenced by current economic conditions and national priorities.
The Fund’s evaluation of Nigeria’s economy and suggestions for the authorities to take into account are included in the IMF Article IV Consultation Report. These suggestions are not legally binding on Nigeria and do not constitute government policy.
Part of 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 completely undo any economic progress the current government has made over the past three years, cripple businesses, and worsen hardship.
Dele Oye, the chairman of the Alliance for Economic Research and Ethics LTD/GTE, is among those who have voiced strong opposition to the detrimental effects of such taxes.
He maintained that such actions were insensitive, would further impair businesses, and would make life more difficult for the more than 140 million impoverished Nigerians.
Oye emphasised that tax collections increased by more than 180 percent in just three years, from N10.1 trillion in 2022 to N28.3 trillion in 2025, demonstrating that Nigeria can increase its revenue without imposing new taxes on struggling households and businesses.
At a time when an estimated 140 million Nigerians live below the poverty line, he pointed out that adding new taxes on fuel and telecom services would put an additional burden on people who already struggle with inflation, high living expenses, and low purchasing power.
He maintained that Nigerian companies were already burdened by what he called “hidden taxes,” which included exorbitant borrowing costs, erratic electricity, numerous levies imposed at various governmental levels, fluctuations in foreign exchange, and costs associated with security.
He emphasised that rising energy prices and commercial lending rates above 35% have greatly raised the cost of doing business, cautioning that higher taxes might deter investment and impede economic expansion.
Bolu Oyeniyi, a tax-savvy lawyer from Lagos, also questioned the need for new taxes when improvements in tax administration could result in significant additional revenue. He cited the IMF’s own assessment that administrative reforms alone could produce gains comparable to those anticipated from new tax measures.
He wants the Federal Government to improve tax compliance, lower the cost of governance, stop revenue leakages, formalise more of the informal economy, and examine tax incentives that big businesses and extractive industries enjoy rather than enacting new taxes.
He also cautioned that additional fuel taxes could have a knock-on effect on the economy by raising transportation costs and food prices, while taxing telecommunications would hinder financial innovation and digital inclusion.
Instead of adding more burdens to consumers and business owners, he urged the government to put economic recovery ahead of new taxes and concentrate on fostering an environment that allows companies to expand and create jobs.
He urged the government to reject the IMF’s recommendations on fuel and telecom taxes and pursue reforms that boost the economy rather than worsen suffering, saying, “The patient needs recovery time, not another surgery.”
Lanre Adebowale, a civil servant with the Lagos State Ministry of Commerce, also made a contribution. He denounced the IMF’s recommendation and cautioned the government against accepting any more recommendations or advice from the international monetary organisation.
He claimed to recall how the same IMF’s recommendations to Gen. Ibrahim Babangida’s military government in 1986 put Nigeria in a severe economic bind from which it has never been able to escape.
He cautioned that no Nigerian would ever benefit from IMF advice; rather, it would only make Nigeria’s economic problems worse.
“I still clearly recall how the Babangida administration used IMF loans to ruin Nigeria. The government’s implementation of the Structural Adjustment Programmes (SAP), an economic policy, was one of the requirements for obtaining the loan back then.
“This was the beginning of Nigeria’s economic crisis, which we are still dealing with today,” he said.
He bemoaned the fact that initiatives intended to reduce government deficits, stabilise struggling economies, and move countries towards market-driven, internationally competitive systems ultimately destroyed Nigeria’s economy and caused terrible suffering for Nigerians.
He stated that currency devaluation, privatisation, public spending cuts, market liberalisation, and tax reforms were the main elements of the programmes.
State-owned businesses that were the pride of Nigeria, such as Nigeria Telecommunications Limited, NITEL, Nigeria Hotels, Nigeria Airways, and numerous other public companies, were sold to a small number of “connected” people at giveaway prices.
The same IMF has returned to suggest that Nigerians be subject to taxes on telecommunications services and petroleum products. Recall that the majority of household businesses have failed due to the lack of electricity and the high cost of fuel (more than N1200 per litre) needed to run the generators.
Additionally, keep in mind that Nigerians pay the highest data rates of any country in the world—a development that continues to cause public outrage.
And now we are reading about the IMF’s recommendation to raise taxes on these goods and services.
“This is very regrettable, but the good news is that the government has stated that it is not considering raising taxes on gasoline and telecoms.
He said, “That’s good enough, but going forward, I advise Nigeria not to listen to the IMF because it will always give advice that will favour it and not the one that will favour Nigeria.”
About The Author
