The Federal Government of Nigeria has dismissed reports suggesting it plans to introduce new taxes on telecommunications services and petroleum products, following recommendations in the International Monetary Fund (IMF) Article IV Consultation Report on Nigeria.
Government Clarifies Stance
In a statement by Efe Ovuakporie, Head of Information and Public Relations at the Federal Ministry of Finance, the government emphasized that the IMF report's recommendations are not binding and do not reflect official policy. The statement said: "The government has dismissed reports suggesting that it has adopted or is considering new taxes on telecommunications services and petroleum products following the publication of IMF's Article IV Consultation Report on Nigeria."
IMF Recommendations
The IMF had suggested introducing taxes on fuel and telecom services to boost revenue and create fiscal space for development. However, the government maintained that tax decisions must follow constitutional and legislative processes, guided by national priorities and economic realities.
The government also clarified that the Value Added Tax (VAT) waiver on petroleum products remains in force.
Debt Servicing Concerns
The IMF projected Nigeria's interest payments would consume 53.7% of revenue in 2026, up from 53.2% in 2025 and 40.8% in 2024. Despite this, IMF Resident Representative Christian Ebeke stated that Nigeria's debt is sustainable and the risk of sovereign stress moderate.
Ebeke noted that Nigeria's debt-to-GDP ratio remains in the mid-30% range, comparing favorably with peers, and the debt portfolio benefits from a balanced mix of domestic and external borrowing. However, he highlighted that over 50% of tax collection going to interest payments leaves little room for health, education, and security.
Economic Projections
The IMF expects the interest-to-revenue ratio to ease to 52.4% by 2027, with average inflation forecast at 16% in 2026. Gross international reserves are projected to rise from $40.2 billion in 2024 to $58.1 billion in 2026 and $62 billion in 2027.
