03/07/2026
BREAKING: Federal Government Slashes Vehicle Import Duties –
What You Need to Know
The Federal Government has commenced implementation of sweeping reductions to import duties on vehicles, effective July 1, 2026, as part of the 2026 Fiscal Policy Measures approved by the Minister of Finance and Coordinating Minister of the Economy.
The Nigeria Customs Service confirmed the rollout through a public notice, stating the reforms represent a major shift in fiscal and trade policy by balancing revenue generation with environmental protection and economic development.
The Legal Instrument: 2026 Fiscal Policy Measures.
The changes are authorized by the 2026 Fiscal Policy Measures, approved by Finance Minister Taiwo Oyedele. The policy targets 127 tariff lines with reduced rates, covering everything from food staples to passenger vehicles. The NCS began implementation on July 1, 2026, with a nationwide sensitisation programme held at the Apapa Area Command on June 26 to prepare stakeholders.
Category 1: Import Levy Reductions on New and Used Vehicles
Under the revised tariff regime, the import levy has been significantly cut. For brand‑new vehicles, the levy dropped from 20% to 10% – a 50% reduction. For used vehicles (Tokunbo), the levy was slashed from 15% to 5% – a 67% reduction.
This is designed to ease the cost of vehicle importation, reduce the financial burden on importers, and potentially improve access to vehicles for consumers.
Category 2: Duty on Fully Built Passenger Vehicles
Beyond the import levy, the overall import duty on fully built passenger vehicles has been slashed from 70% to 40%. This 30 percentage‑point reduction aims to lower the landed cost of complete vehicles imported into Nigeria.
Category 3: Zero‑Duty Exemptions – Electric Vehicles and Mass Transit Buses
In a significant move to promote cleaner energy and reduce transport costs, the government has fully exempted electric vehicles and mass transit buses from import duties. This is part of a broader green tax framework intended to accelerate Nigeria's transition to environmentally sustainable transportation.
Category 4: The Green Tax Surcharge – Bigger Engines Pay More
Alongside the duty cuts, the government introduced a new Green Tax Surcharge on petrol‑powered vehicles with engine capacities exceeding 2,000cc. Vehicles between 2,000cc and 3,999cc attract a 2% surcharge, while those 4,000cc and above attract 4%. Popular SUVs such as the Toyota Land Cruiser, Mercedes‑Benz GLE, Volvo XC90, and performance vehicles like the Porsche 911 will now attract the new environmental levy.
Vehicles exempt from the surcharge include electric vehicles, mass transit buses, locally manufactured vehicles, and vehicles with engines below 2,000cc.
Additional Fiscal Measures
Beyond the automotive sector, the 2026 Fiscal Policy Measures also include duty reductions on rice (from 70% to 47.5%), crude palm oil (from 35% to 28.75%), and agricultural and manufacturing machinery – now completely exempt. Waste PET has also been added to the export prohibition list to encourage domestic recycling.
Industry Reaction and What It Means for You
Prince Ajibola Adedoyin, President of the National Association of Motor Dealers of Nigeria, described the levy reduction as a good step. However, he cautioned that the overall impact on vehicle prices will depend on the implementation details of the Green Tax Surcharge. "If the surcharge is less than the reduction, then it is a plus and we can expect some improvement in vehicle prices. But if it is the same as or more than what has been removed, then there will be little or no difference," he said.
Dealers have adopted a wait‑and‑see approach, as detailed implementation guidelines are yet to be fully circulated. While the duty cuts are expected to lower the cost of vehicle importation, multiple other levies still apply – including a 7% surcharge calculated on the duty, a 15% National Automotive Council levy, and 7.5% VAT. The actual impact on retail prices will depend on how importers pass on savings and how the exchange rate affects landed costs.
Official Confirmation
The Nigeria Customs Service confirmed the policy rollout through its official channels. Deputy Comptroller General of Customs and National Public Relations Officer, Mr. Abdullahi Maiwada, confirmed the take‑off. The NCS stated: "Beginning 1st July, 2026, the Nigeria Customs Service will implement the Green Tax Surcharge as part of the 2026 Fiscal Policy Measures to support environmental sustainability, while also reducing the import levy on new vehicles from 20% to 10% and that of used vehicles from 15% to 5% to ease the cost of vehicle importation."
