FG Slashes Vehicle Import Levies, Reduces Tariffs On Key Food Imports As Customs Begins Green Tax Implementation

FG slashes vehicle import levies, reduces tariffs on key food imports as Customs begins Green Tax implementation The Federal Government has announced a reduction in import levies on vehicles and lower tariffs on selected essential food items, including rice and crude palm oil, as part of a broader strategy to ease the cost-of living crisis and stimulate economic activity. The measures, implemented under the 2026 Fiscal Policy Measures, also mark the commencement of the Green Tax Surcharge by the Nigeria Customs Service NCS, a new environmental levy aimed at promoting cleaner transportation while cushioning consumers through reduced import charges. Under the revised policy, the import levy on brand-new vehicles has been reduced from 20 per cent to 10 per cent, while the levy on used vehicles has been cut from 15 per cent to 5 per cent. In addition, customs duty on fully built passenger vehicles has been reduced from 70 per cent to 40 per cent, a move expected to lower the overall cost of vehicle importation and make car ownership more affordable for Nigerians. Government officials said the reductions are intended to offset the impact of the newly introduced Green Tax and support economic recovery by reducing transportation costs. The Nigeria Customs Service confirmed that implementation of the Green Tax began on July 1, 2026, targeting imported vehicles with higher engine capacities as part of Nigeria’s environmental sustainability agenda. Under the policy, imported vehicles with engine capacities between 2,000cc and 3,999cc attract a 2 per cent Green Tax, while those with engines of 4,000cc and above are subject to a 4 per cent surcharge. The Customs Service said the surcharge will be assessed separately from existing customs duties to ensure transparency in implementation. To encourage cleaner transportation and improve public mobility, the Federal Government has exempted electric vehicles, mass transit buses, and certain locally manufactured vehicles from the Green Tax. Officials said the exemptions are designed to promote investment in environmentally friendly transport while reducing the financial burden on operators of public transportation.Beyond the automobile sector, the new fiscal measures also reduce tariffs on several essential food commodities, including rice, crude palm oil, and other strategic imports.

The government said the tariff adjustments are aimed at improving food affordability, easing inflationary pressures, and supporting households facing rising living costs. The broader package includes revised import duties on more than 100 tariff lines covering agricultural products, industrial inputs, and manufacturing materials as part of efforts to boost productivity and strengthen the economy. While many importers and vehicle dealers have welcomed the reduction in import levies, some industry stakeholders say they are awaiting detailed implementation guidelines to fully assess the impact of the Green Tax on vehicle prices and the automotive market. Analysts believe the lower import duties could help moderate vehicle prices if the savings are passed on to consumers, although the overall effect will depend on exchange rates, logistics costs, and market conditions. The Federal Government said the fiscal measures are intended to balance environmental sustainability with economic relief by encouraging cleaner technologies while reducing the cost of essential goods. Officials expressed confidence that the combined effect of lower import levies, reduced food tariffs, and targeted tax incentives will help cushion the impact of inflation, improve access to transportation, and support economic growth in the months ahead.