(vehicle import. Photo by Nigeria Stories)
The Federal Government’s reduction in vehicle import levies has officially taken effect, offering hope of lower vehicle prices while prompting auto dealers to seek clarity on the newly introduced Green Tax before assessing the full impact of the policy.
The implementation, which commenced under the 2026 Fiscal Policy Measures, reduces the import levy on new vehicles from 20 per cent to 10 per cent, while the levy on used vehicles has been cut from 15 per cent to five per cent.
The measure is aimed at easing the cost of imports, stimulating economic activity and providing relief to businesses and consumers.
Alongside the levy reduction, the government has introduced a Green Tax Surcharge on certain categories of imported vehicles as part of efforts to promote environmental sustainability.
However, industry operators say the absence of clear details on the surcharge makes it difficult to determine whether the policy will ultimately translate into lower vehicle prices.
Speaking in an interview, the President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, described the reduction in levies as a positive development but said its benefits would depend largely on the size of the Green Tax.
He explained that dealers currently do not know what the surcharge will be, noting that if the levy on vehicles is reduced only for another surcharge to be introduced, the actual impact cannot be determined until the size of that surcharge is known.
Ajibola noted that while reducing the levy on used vehicles from 15 per cent to five per cent represents a significant concession, the gains could be diminished if the Green Tax offsets the reduction.
He explained that if the surcharge turns out to be far less than the reduction granted, it would count as a plus, but if it matches or exceeds it, then effectively nothing would have changed.
He added that import duties remain one of the biggest contributors to the high cost of vehicles in Nigeria, aside from foreign exchange challenges.
According to him, the policy has the potential to lower vehicle prices, particularly for commercial vehicles where the tariff reduction is more substantial, provided the Green Tax remains minimal.
He described the development as a very good one, stressing that there is no doubt about that, but maintained that knowing the exact effect on prices requires clarity on the Green Tax, adding that if it turns out to be very minimal, the reduction in levies would still be significant enough for consumers to feel its impact.
Stakeholders say they will continue to monitor the implementation of the new fiscal measures as the Nigeria Customs Service rolls out the revised tariff structure, with expectations that greater clarity on the Green Tax will determine whether the levy reduction delivers meaningful price relief for vehicle buyers.