Relief For Importers As FG Slashes Vehicle Import Levies, Rolls Out Green Tax

The Federal Government has officially rolled out a sweeping reduction on vehicle import levies as part of the newly commenced 2026 Fiscal Policy Measures. Under the revised framework, the import levy on brand-new vehicles has been halved from 20% to 10%, while the levy on used vehicles (popularly known as Tokunbo) has been slashed significantly from 15% to 5%. The aggressive cuts aim to bring immediate financial relief to the automotive sector, lower the landing cost of automobiles, and ease the persistent cost-of-living and transportation pressures facing Nigerians.

The policy overhaul, approved by the Minister of Finance and Coordinating Minister of the Economy, introduces broader changes across the nation’s maritime and transport sectors. In tandem with the levy reductions, the import duty on fully built passenger vehicles has also dropped from 70% to 40%. To further accelerate cleaner energy adoption and cushion high logistics costs, mass transit buses and electric vehicles (EVs) have been granted a 100% exemption from import duties.

While the tariff cuts offer heavy relief, the Nigeria Customs Service has simultaneously commenced the implementation of a new "Green Tax" Surcharge targeting higher-engine vehicles to support environmental sustainability.

As the Nigeria Customs Service begins enforcement of the new rates at the ports, industry stakeholders are expressing measured optimism. The National Association of Motor Dealers has described the development as a major concession by the government. However, auto dealers note that the actual long-term impact on dealership prices will depend heavily on the magnitude of the newly introduced Green Tax surcharge and the stability of the foreign exchange market, which dictates clearing rates.

What are your thoughts on the Federal Government’s massive cut on vehicle import levies? Do you think this will noticeably drop car prices in the market? Drop your comments below!

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