FG Cuts Vehicle Import Duties, Introduces Green Tax to Ease Costs
The Federal Government has reduced import duties and levies on vehicles while commencing the implementation of a new Green Tax as part of the 2026 Fiscal Policy Measures aimed at lowering transportation costs, promoting environmental sustainability and easing the cost of living.
The Nigeria Customs Service (NCS) announced that the policy took effect on July 1, 2026, following approval by the Minister of Finance and Coordinating Minister of the Economy.
Under the new tariff regime, the import levy on new vehicles has been reduced from 20 per cent to 10 per cent, while that of used vehicles has dropped from 15 per cent to five per cent. Import duty on fully built passenger vehicles has also been slashed from 70 per cent to 40 per cent.
The government further approved a complete waiver of import duties on mass transit buses and electric vehicles (EVs), a move expected to reduce transportation costs and encourage the adoption of cleaner energy.
The revised policy is expected to benefit transport operators who rely heavily on imported buses, trucks, minibuses and other commercial vehicles for the movement of passengers and goods across the country.
In addition to the changes affecting vehicles, the government also reduced import duties on several essential commodities. Import duty on rice has been cut from 70 per cent to 47.5 per cent, while broken rice now attracts a 30 per cent duty. Crude palm oil duty has been reduced from 35 per cent to 28.75 per cent, while raw cane sugar duties have been lowered to between 55 and 57.5 per cent.
The fiscal measures also provide a complete waiver of import duties on agricultural and manufacturing machinery to support food production and industrial growth. Meanwhile, Waste PET has been added to the export prohibition list to encourage local recycling and strengthen the domestic recycling industry.
According to the Nigeria Customs Service, the reforms represent one of the country’s most significant tariff overhauls in recent years, affecting 127 tariff lines with the goal of reducing import costs, boosting economic activity and supporting sustainable development.
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