The Federal Government has confirmed that the VAT waiver on petroleum products remains active, dismissing reports of a new fuel tax or surcharge. The government also clarified that no new taxes are being introduced on fuel or telecommunications services.
FG Clears the Air on Tax Reports
The clarification came after concerns were raised over recommendations contained in the International Monetary Fund's (IMF) latest Article IV Consultation Report on Nigeria. The report suggested that the country could expand its tax base by extending Value Added Tax (VAT) to petroleum products and introducing excise duties on telecommunications services.
However, the Federal Ministry of Finance said the IMF's recommendations are only advisory and do not represent government policy. In a statement, the ministry stressed that decisions on taxation are made solely by the Nigerian government through constitutional and legislative processes.
"The recommendations contained in the IMF Article IV Consultation Report are advisory and not binding. They do not automatically translate into government policy or fiscal measures," the ministry said.
VAT Waiver on Fuel Remains Active
The Federal Government dismissed recommendations to expand the tax base through petroleum products, keeping the current VAT waiver on fuel active. The government also clarified that the VAT waiver on petroleum products remains in place and that there are no plans to introduce new taxes on fuel.
It further explained that although the law provides for a possible fuel surcharge, such a measure can only take effect through a ministerial order published in the Official Gazette. According to the ministry, no such process is currently underway.
Telecom Tax Remains Repealed
On telecommunications, the government said reports of a new tax are false, noting that the excise duty previously proposed for telecom services has already been repealed under Nigeria's new tax laws. The proposed 5% telecom tax remains repealed under Nigeria's current fiscal laws, protecting consumers from additional network charges.
Rather than introducing new taxes, the government said its focus is on improving tax administration, increasing compliance, plugging revenue leakages and expanding economic activity to boost revenue.
The ministry added that any future tax policy would be communicated through official channels and implemented only in accordance with the law.
Public Concern Over Cost of Living
The clarification comes amid growing public concern over the cost of living, with many Nigerians worried that additional taxes on fuel or telecommunications services would further increase household expenses. The IMF's Article IV Consultation is an annual review of Nigeria's economy during which the Fund assesses economic performance and offers policy recommendations.
While the IMF encouraged Nigeria to broaden its tax base to improve government revenue and strengthen fiscal sustainability, the Federal Government maintains that those recommendations remain advisory and have not been adopted.
