FG reduces vehicle import levies as the Federal Government introduces sweeping tariff reforms aimed at lowering transport costs, supporting businesses and promoting environmental sustainability.
The Nigeria Customs Service (NCS) announced that implementation of the new fiscal measures began on July 1, 2026, under the 2026 Fiscal Policy Measures approved by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The reforms reduce import levies on vehicles, eliminate duties on selected imports and introduce a new Green Tax designed to encourage cleaner transportation and sustainable economic growth.
Government Cuts Vehicle Import Duties
Under the revised tariff structure, the government reduced the import levy on new vehicles from 20 per cent to 10 per cent.
It also lowered the levy on used vehicles from 15 per cent to five per cent.
In addition, Customs reduced the duty on fully built passenger vehicles from 70 per cent to 40 per cent.
The government believes these changes will lower the cost of importing vehicles and improve access to affordable transportation for Nigerians.
The policy also exempts mass transit buses and electric vehicles (EVs) from import duties.
Officials said the exemption aims to reduce public transport costs while encouraging the adoption of cleaner and more environmentally friendly vehicles.
Transport Sector Expected to Benefit
The latest tariff adjustments are expected to provide relief for transport operators across the country.
Many transport companies rely heavily on imported buses, trucks, minibuses and light commercial vehicles for passenger services and cargo movement.
Lower import costs could reduce operating expenses for transport businesses.
In turn, this may help stabilise transport fares and reduce logistics costs across several sectors.
Transportation remains a major contributor to food prices in Nigeria.
Agricultural products such as maize, millet, sorghum, cassava and yams often travel long distances from northern farming communities to markets in southern cities.
Lower transportation costs could therefore help reduce the prices of essential food items for consumers.
Import Duties Reduced on Food and Industrial Inputs
The Federal Government also introduced significant reductions on import duties for essential food products.
The duty on bulk rice fell from 70 per cent to 47.5 per cent.
The tariff on broken rice dropped further to 30 per cent.
Meanwhile, import duties on raw cane sugar now range between 55 per cent and 57.5 per cent.
The government also reduced the duty on crude palm oil from 35 per cent to 28.75 per cent.
Officials said the reductions will lower production costs for food manufacturers while making essential commodities more affordable for households.
Machinery Imports Receive Duty Exemption
The fiscal measures also support agricultural and industrial production.
Import duties on agricultural machinery and manufacturing equipment have been completely removed.
The government expects this incentive to encourage investment, improve productivity and reduce production costs across key sectors.
In another major policy change, Waste PET has been added to Nigeria’s export prohibition list.
The decision seeks to strengthen the domestic recycling industry by ensuring more recyclable materials remain available for local processing.
Green Tax Introduced Under New Fiscal Policy
Alongside the tariff reductions, the Nigeria Customs Service has begun implementing the newly introduced Green Tax Surcharge.
According to Customs, the environmental levy forms part of the 2026 Fiscal Policy Measures aimed at promoting cleaner technologies and supporting sustainable economic development.
The Green Tax complements incentives such as duty-free imports for electric vehicles and mass transit buses.
Together, the measures are designed to reduce carbon emissions while encouraging investment in environmentally friendly transportation.
One of Nigeria’s Biggest Tariff Reforms
The latest policy represents one of the most comprehensive revisions of Nigeria’s tariff system in recent years.
According to the Nigeria Customs Service, the reforms affect 127 tariff lines covering household goods, industrial inputs, transport equipment and agricultural products.
The government expects the new framework to ease the cost of living, support local industries, encourage investment and improve overall economic productivity.
Conclusion
The decision as FG reduces vehicle import levies marks a significant shift in Nigeria’s trade and fiscal policy.
By lowering import duties, introducing the Green Tax and exempting key sectors from tariffs, the Federal Government aims to reduce transportation costs, support businesses and encourage environmentally sustainable growth.
If successfully implemented, the reforms could provide much-needed relief for consumers while strengthening economic activity across multiple industries.
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