FG reduces vehicle import levies as dealers await Green Tax details

Nigeria's Federal Government has officially implemented a reduction in vehicle import levies, aiming to lower prices and stimulate economic activity. The import levy on new vehicles has been cut from 20% to 10%, while the levy on used vehicles has seen a more substantial decrease from 15% to 5%. This policy, part of the 2026 Fiscal Policy Measures, is intended to ease import costs and provide relief to consumers and businesses.

However, the introduction of a Green Tax Surcharge on certain imported vehicles has created uncertainty within the auto industry. Auto dealers are seeking clarity on the surcharge's details, as its size will determine whether the levy reduction ultimately translates into lower vehicle prices. Prince Ajibola, President of the National Association of Motor Dealers, stated that the reduction is a positive development, but its true benefit hinges on the Green Tax amount.

"We don’t know what the surcharge is going to be. If they reduce the levy on vehicles and then introduce another surcharge, we need to know how much it is before we can say there will be any considerable change," Ajibola said. He explained that if the surcharge is less than the levy reduction, it's a gain, but if it's equal or higher, the overall impact on prices will be minimal. Import duties and foreign exchange challenges are cited as major contributors to high vehicle costs in Nigeria.

Stakeholders are closely monitoring the Nigeria Customs Service as it rolls out the revised tariff structure. The effectiveness of the levy reduction in providing meaningful price relief to buyers will largely depend on the clarity and magnitude of the Green Tax.

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We don’t know what the surcharge is going to be. If they reduce the levy on vehicles and then introduce another surcharge, we need to know how much it is before we can say there will be any considerable change.