The Sea Empowerment and Research Center (SEREC) has called on the Federal Government to exercise caution over recommendations reportedly made by the International Monetary Fund (IMF) advocating the extension of Value Added Tax (VAT) to petroleum products and the imposition of excise duties on telecommunications services In a position paper dated June 15, 2026, and signed by its Head of Research, Fwdr. Eugene Nweke, RFF, the Centre warned that implementing such measures amid prevailing economic challenges could further exacerbate inflation and increase hardship for millions of Nigerians.
SEREC acknowledged the need for government to generate sustainable revenue to address fiscal deficits and fund critical infrastructure and social services. However, it cautioned that imposing additional taxes on fuel and telecommunications services could trigger far-reaching economic consequences.
According to the Centre, Nigeria is already grappling with rising inflation, declining purchasing power, exchange rate instability, unemployment, food insecurity, and escalating transportation costs. It argued that extending VAT to petroleum products would increase operational expenses across transportation, agriculture, manufacturing, maritime, and logistics sectors, ultimately leading to higher costs for goods and services nationwide.
The Centre also raised concerns over the proposed excise duties on telecommunications services, describing telecoms as a vital economic enabler rather than a luxury. It noted that increased taxes on voice and data services would likely be transferred to consumers, thereby widening the digital divide and undermining efforts to build an inclusive digital economy.
SEREC further warned that while the proposed taxes may boost government revenue in the short term, they could ultimately suppress consumption, weaken business competitiveness, increase production costs, and reduce economic activities that generate sustainable revenue.
Addressing the potential impact on the maritime and logistics sectors, the Centre stated that higher fuel costs would inevitably lead to increased freight charges, cargo evacuation expenses, inland transportation costs, and port operational expenses, thereby affecting Nigeria’s trade competitiveness and export growth prospects.
As alternatives, SEREC recommended strengthening tax administration, plugging revenue leakages, broadening the tax base, boosting productivity and industrial output, reducing the cost of governance, intensifying anti-corruption measures, and enhancing transparency in public financial management.
The organization also advocated sustained reforms in customs administration and port operations, increased local content participation in strategic sectors, and greater investment in the blue economy and indigenous shipping development as viable sources of non-oil revenue.
SEREC emphasized that any future tax reforms should be preceded by comprehensive socio-economic impact assessments, extensive stakeholder consultations, and poverty-impact evaluations.
“The pursuit of fiscal sustainability must not come at the expense of social stability and economic growth,” the Centre stated, stressing that policies that encourage production, investment, job creation, and stronger consumer purchasing power should take precedence over additional consumption taxes.
Invoking the spirit of the Federal Government’s Renewed Hope Agenda, SEREC urged policymakers to adopt a cautious, evidence-based, and people-centred approach in considering any proposal relating to VAT on petroleum products and excise duties on telecommunications services.
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