Juliet Oladele, Reporting
THE Federal Government has announced sweeping tariff reforms aimed at lowering the cost of living, with import levies on new and used vehicles cut by as much as half, in a move expected to drive down prices of popular Tokunbo cars by around 10 per cent.
The Nigeria Customs Service (NCS) confirmed on Wednesday that implementation of the new Green Tax Surcharge commenced on 1 July 2026, under the 2026 Fiscal Policy Measures approved by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.
Under the revised regime, the import levy on new vehicles has been reduced from 20 per cent to 10 per cent, while the levy on used vehicles has been slashed from 15 per cent to five per cent. Industry stakeholders have indicated that the reductions are expected to lower the landing cost of imported vehicles, leading to an estimated 10 per cent drop in the prices of Tokunbo cars.
In a further boost to affordability, import duty on passenger vehicles has been cut from 70 per cent to 40 per cent, significantly reducing the overall cost of vehicle imports. The government has also granted full import duty waivers for mass transit buses and electric vehicles (EVs), a strategic move aimed at reducing public transportation costs while encouraging the adoption of cleaner energy alternatives.
Transport and Food Costs to Benefit
The reforms are expected to be a particular boon for transport operators who rely heavily on imported buses, trucks, minibuses and light commercial vehicles for interstate haulage and urban transportation. Given that transportation accounts for a significant share of food distribution costs, the lower import duties could also help moderate the prices of agricultural produce such as maize, sorghum, millet, yams and cassava transported from northern farming communities to southern markets.
Broader Tariff Relief
Beyond the automobile sector, the new fiscal measures provide broad tariff relief on several essential commodities and industrial inputs. Import duty on rice has been reduced from 70 per cent to 47.5 per cent, while the rate for broken rice has been lowered to 30 per cent. Duties on crude palm oil have also been cut from 35 per cent to 28.75 per cent.
Similarly, raw cane sugar now attracts import duties ranging between 55 per cent and 57.5 per cent, reducing production costs for food manufacturers. The government also removed import duties entirely on agricultural and manufacturing machinery to support increased productivity and industrial growth.
In a move to strengthen local recycling, Waste PET has been added to the country’s export prohibition list to ensure greater availability of recyclable materials for domestic processors.
Comprehensive Reform
The 2026 Fiscal Policy Measures represent one of Nigeria’s most comprehensive tariff reforms in recent years, affecting 127 tariff lines across key sectors of the economy. The Federal Government said the measures are designed to reduce import costs, support local industries, improve food and transport affordability, and stimulate economic growth while advancing environmental sustainability through the newly introduced Green Tax framework.
