Nigerian Govt Slashes Vehicle Import Levies, Introduces Green Tax

The Federal Government’s revised vehicle import levy regime has officially taken effect, raising hopes of lower automobile prices across the country as part of the 2026 Fiscal Policy Measures.

Under the new policy, the import levy on brand-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.

The government said the review is aimed at reducing import costs, stimulating economic activities and providing relief to businesses and consumers in the automotive sector.

Alongside the levy reductions, however, the government has introduced a Green Tax surcharge on selected categories of imported vehicles as part of efforts to promote environmental sustainability.

The new tax has generated uncertainty among automobile dealers, who say the overall impact of the policy cannot be assessed until details of the Green Tax are made public.

Speaking with Vanguard, President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, described the reduction in import levies as a positive development but stressed that the Green Tax could offset the expected benefits.

“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,” he said.

Ajibola noted that while the reduction in levy on used vehicles represents a significant concession, the gains could be eroded if the environmental surcharge is substantial.

“If the surcharge is far less than what has been reduced, then it’s a plus. But if it is the same or even higher, then it has not really changed anything,” he explained.

He added that import duties, alongside foreign exchange challenges, remain key factors responsible for the high cost of vehicles in Nigeria.

According to him, the revised tariff regime could lower vehicle prices, particularly for commercial vehicles, provided the Green Tax remains minimal.

Industry stakeholders said they would continue to monitor the implementation of the new fiscal measures by the Nigeria Customs Service.

They maintained that greater clarity on the Green Tax structure would determine whether the reduction in import levies translates into meaningful price relief for vehicle buyers and businesses operating in Nigeria’s automotive sector.