Nigerian economists have urged the Federal Government to ignore the International Monetary Fund’s (IMF) recommendation to impose new taxes on fuel and telecommunications services, warning that such measures could worsen the economic hardship already facing millions of Nigerians.
The IMF, in its latest Article IV Consultation Report on Nigeria, advised the government to consider extending Value Added Tax (VAT) to fuel products and introducing excise duties on telecom services as part of efforts to increase revenue and fund development projects.
However, several economists have strongly opposed the proposal, arguing that Nigerians are already struggling with high inflation, rising electricity costs, increased telecom tariffs and the lingering effects of recent economic reforms.
Professor Hassan Oaikhenan of the University of Benin described the recommendation as “overkill,” stressing that households and businesses are already under immense pressure from the rising cost of living.
According to him, introducing additional taxes at a time when citizens are battling shrinking purchasing power would only deepen economic hardship and further reduce disposable income.
Also reacting, economist and Chief Executive Officer of CFG Advisory, Tilewa Adebajo, said the recommendation comes at the wrong time, noting that Nigeria’s new tax reforms only began implementation earlier this year and are still gaining traction.
He argued that introducing fresh taxes could undermine the progress being made and place unnecessary pressure on businesses trying to navigate economic uncertainties.
Similarly, Ayokunle Olubunmi, Head of Financial Institutions Ratings at Agusto & Co, said the current economic climate does not support additional taxes, especially with many Nigerians still adjusting to the impact of fuel subsidy removal, foreign exchange reforms and other policy changes.
Another economist, Dr. Justin Amase, also maintained that increasing VAT or introducing telecom excise duties under current conditions would hurt both consumers and businesses despite Nigeria’s low tax-to-GDP ratio.
While the IMF insists that stronger revenue mobilisation is necessary to create fiscal space for infrastructure and social spending, critics believe the timing is wrong and could further strain households already facing record levels of poverty and food insecurity.
The debate comes as Nigeria continues to search for ways to boost government revenue without worsening the financial burden on citizens.
