The Federal Government has slashed levies on imported vehicles and introduced a new Green Tax as part of a sweeping overhaul of Nigeria’s tariff regime aimed at easing the cost-of-living crisis.
The reforms, which took effect on July 1, 2026, was announced by the Nigeria Customs Service (NCS) under the 2026 Fiscal Policy Measures approved by the Coordinating Minister of the Economy and Minister of Finance, Taiwo Oyedele.
The measures also include substantial reductions in import duties on food items, complete duty waivers for electric vehicles and mass transit buses, and the removal of import duties on agricultural and manufacturing machinery.
As part of the reforms, the Federal Government reduced the import levy on new vehicles from 20 per cent to 10 per cent, while the levy on used vehicles was cut from 15 per cent to five per cent.
Import duty on passenger vehicles has also been reduced from 70 per cent to 40 per cent, a move expected to lower the cost of importing vehicles into Nigeria and make car ownership more affordable.
Alongside the tariff reductions, the Nigeria Customs Service has commenced implementation of the Green Tax Surcharge, a policy designed to encourage environmentally sustainable practices and cleaner transportation.
In line with that objective, the government has granted a full import duty exemption for mass transit buses and electric vehicles (EVs).
The incentive is expected to lower the cost of acquiring commercial buses used for public transportation while encouraging Nigerians and businesses to adopt cleaner energy alternatives.
The reforms are expected to provide significant relief for transport operators, many of whom rely on imported buses, trucks, minibuses and light commercial vehicles for interstate and urban transport services.
Transportation remains one of the biggest drivers of food inflation in Nigeria, with the cost of moving agricultural produce from northern farming communities to markets in southern cities contributing significantly to rising food prices.
Staple commodities such as maize, millet, sorghum, yam and cassava often become more expensive due to high logistics costs incurred during transportation.
The new tariff regime also provides relief on several essential food imports.
Import duty on rice has been reduced from 70 per cent to 47.5 per cent, while duty on broken rice has been lowered further to 30 per cent.
Similarly, import duty on crude palm oil has been cut from 35 per cent to 28.75 per cent, while duties on raw cane sugar now range between 55 per cent and 57.5 per cent.
The government expects the reductions to lower production costs for food manufacturers and improve affordability for consumers facing persistent inflation.
In another major policy shift, import duties on agricultural machinery and manufacturing equipment have been completely removed.
The exemption is intended to support mechanised farming, boost local manufacturing and reduce production costs for businesses.
The government has also added Waste PET to the country’s export prohibition list to encourage domestic recycling and strengthen Nigeria’s recycling industry.
According to the Nigeria Customs Service, the reforms affect 127 tariff lines, covering products that are central to household consumption, transportation, agriculture and industrial production.
The Federal Government says the package is designed to cushion the effects of the country’s rising cost of living, improve the ease of doing business, stimulate domestic production and promote environmentally sustainable economic growth.