The International Monetary Fund is pressing the federal government to extend value-added tax to fuel products and levy new charges on telecommunications services, warning that the government’s spending ambitions outpace its current capacity to raise money.
“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 Washington-based lender said in recommendations, contained in the fund’s 2026 Article IV consultation report on Nigeria.
Nigeria’s federal government has ramped up capital spending in the 2026 budget, but the IMF cautioned that there is little room to maintain that trajectory without fresh revenue streams.
“Staff’s projections caution that there is limited space to sustain the 2026 ramp up of capital expenditure over the medium-term in the absence of further revenue gains,” the fund said.
The country overhauled its tax framework last year, consolidating several levies and broadening the base of who pays. The IMF acknowledged those reforms could gradually lift collections, particularly if digital tools are deployed to track transactions, verify compliance and reduce opportunities for leakages and graft. But it said administrative improvements alone would not be sufficient to close the gap. Related News Borno Christian leaders call on FG to end insecurity, abductions All 12 passengers die in US plane crash in Missouri FG expands SE infrastructure with Abuja- Cross River Trans-Sahara superhighway
