By Richard Benjamin
ABUJA, June 14, 2026 The International Monetary Fund (IMF) has urged Nigeria to sustain and deepen its ongoing tax reforms to boost government revenue, improve public finances, and expand support for vulnerable citizens affected by economic hardship.
The recommendation was contained in the IMF Executive Board’s conclusions on Nigeria’s 2026 Article IV Consultation released this week, where the Fund commended recent tax reforms while calling for additional measures over the medium term to strengthen domestic revenue mobilisation.
According to the IMF, Nigeria’s revenue to GDP ratio remains among the lowest in the world, limiting the government’s ability to fund critical infrastructure, social services, education, healthcare, and poverty alleviation programmes.
The Fund welcomed the implementation of new tax laws that came into effect on January 1, 2026, describing them as important steps towards modernising the tax system, improving compliance, and strengthening enforcement.
“Directors welcomed the recent tax reforms, noting that additional tax policy measures may be needed over the medium term, including to fund a scaled up cash transfer programme to provide relief to the most vulnerable,” the IMF stated.
While supporting the government’s current focus on improving tax administration rather than increasing rates immediately, the IMF suggested that additional revenue measures may eventually be required to strengthen fiscal sustainability.
Among the measures highlighted were a possible increase in Value Added Tax (VAT), the extension of VAT to fuel products, the introduction of excise duties on telecommunications services, and a review of tax exemptions, waivers, and other concessions.
The IMF estimated that such reforms could generate additional revenue equivalent to nearly four per cent of Nigeria’s Gross Domestic Product over time, helping to reduce dependence on borrowing and create greater fiscal space for development spending.
The Fund also stressed the importance of maintaining a balanced fiscal approach that supports economic stability while protecting social spending and vulnerable households. Nigeria continues to face significant economic challenges following major reforms, including the removal of fuel subsidies and foreign exchange market adjustments.
However, the IMF acknowledged improvements in macroeconomic indicators, including stronger external reserves and projected economic growth of about four per cent. The organisation noted that inflationary pressures remain a concern, particularly amid global economic uncertainties and fluctuations in commodity prices.
Responding to the IMF assessment, Nigerian economic officials welcomed the positive recognition of ongoing reforms and reiterated their commitment to implementing the new tax framework while improving revenue collection efficiency.
Economic analysts say the IMF’s recommendations reflect a broader effort to help Nigeria strengthen non oil revenue sources and reduce reliance on crude oil earnings, which have historically exposed public finances to global market volatility.
The latest review underscores the challenge facing policymakers: increasing government revenue without placing additional burdens on citizens already grappling with high living costs and inflation.
The IMF maintained that any future tax measures should be accompanied by stronger social protection programmes to cushion their impact on low income households and support inclusive economic growth.
