Federal Govt Rules Out New Telecoms Tax, Reaffirms VAT Waiver On Fuel

The federal government on Wednesday flatly rejected reports that it was planning to introduce new taxes on telecommunications services or petroleum products, describing the claims as factually incorrect and a misrepresentation of recommendations contained in a recent International Monetary Fund (IMF) report on Nigeria’s economy.

In a statement issued by the Federal Ministry of Finance, the government also confirmed that the existing Value Added Tax (VAT) waiver on petroleum products has not been withdrawn and remains in full effect, providing continued relief to households and businesses against global energy price volatility.

The clarification comes amid public concern triggered by the publication of the IMF’s Article IV Consultation Report on Nigeria, which included Fund recommendations that were widely interpreted in media reports as signalling an impending increase in taxes on fuel and telecommunications.

The Ministry was emphatic that the IMF’s Article IV Consultation Report represents the Fund’s own assessment and advisory recommendations — not government decisions. It stressed that such recommendations are not binding on Nigeria and do not automatically translate into policy.

“Decisions on tax matters are taken through established constitutional and legislative processes and are guided by national priorities and prevailing economic realities.”

The statement stressed that any future tax measures would be announced through official channels and implemented strictly in accordance with the law — a pointed signal that neither the Finance Ministry nor the Executive had initiated any process to impose new levies on the telecommunications or energy sectors.

On the question of telecommunications taxation, the government disclosed that an excise duty on telecoms services — which had been introduced before 2023 — has since been repealed under new tax legislation and is therefore no longer applicable. The clarification is significant because some reporting had suggested the government was planning to reintroduce or expand such a charge.

Nigeria’s telecommunications sector, which supports hundreds of millions of subscribers and underpins a broad segment of the digital economy, had faced a 5 per cent excise duty that industry operators and consumer groups had long argued was passed on to end users in the form of higher tariffs and data costs. Its repeal was framed by the government as part of a broader effort to reduce the cost of doing business and improve digital inclusion.

On petroleum products, the government drew a careful legal distinction between what current law permits and what policy decisions have been made. It acknowledged that existing legislation provides for a fuel surcharge but clarified that such a measure can only take effect through a ministerial order followed by publication in the Official Gazette. The government stated categorically that no such process is under consideration.

The VAT waiver on petroleum products — a policy that has been maintained to cushion domestic consumers from the full impact of fluctuating global crude prices — was affirmed as still operative. The continued suspension of both the surcharge and the VAT levy, the Ministry said, has helped keep domestic fuel prices relatively stable in an otherwise volatile global energy environment.

Beyond the immediate denials, the statement offered a window into the government’s broader fiscal philosophy under the current administration. The Ministry said the emphasis remains on expanding economic activity, sealing revenue leakages and improving the efficiency of tax administration — rather than broadening the tax base through new impositions on citizens.

“The Federal Government remains focused on reforms that promote economic growth, improve revenue administration and create a more competitive environment for investment and job creation.”

The framing is consistent with the position the government has articulated in recent months as it navigates the challenge of boosting government revenue — which remains among the lowest relative to GDP in the world — without undermining consumer purchasing power or private sector confidence in an economy still absorbing the shocks of subsidy removal and currency devaluation.

The IMF’s Article IV consultation, which triggered the controversy, is a routine annual assessment conducted by the Fund under its surveillance mandate. The report typically contains recommendations on fiscal consolidation, monetary policy, structural reforms and revenue mobilisation. Nigerian authorities have previously accepted some IMF recommendations while departing from others where national circumstances warranted a different approach.

The statement was signed by Efe Ovuakporie, Head of the Information and Public Relations Unit of the Federal Ministry of Finance.