Nigerian govt slashes vehicle import levies, introduces Green Tax

The Federal Government’s revised vehicle import levy regime has officially come into effect, raising expectations of possible reductions in automobile prices.

However, auto dealers seek clarification on the newly introduced Green Tax before determining the overall impact of the policy.

Implemented under the 2026 Fiscal Policy Measures, the new arrangement reduces the import levy on brand-new vehicles 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 policy is intended to lower import costs, stimulate economic activities and provide relief for businesses and consumers in the automotive sector.

In addition to the levy cuts, the government introduced a Green Tax surcharge on selected categories of imported vehicles as part of its environmental sustainability agenda.

However, stakeholders in the automobile industry say uncertainty surrounding the exact structure and cost implications of the Green Tax makes it difficult to determine whether consumers will eventually benefit from lower vehicle prices.

Speaking in an interview with Vanguard, President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, described the levy reduction as a welcome development but stressed that the full impact would depend on the magnitude of the Green Tax.

“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 stated.

Ajibola noted that although the reduction in levy on used vehicles from 15 per cent to five per cent represents a major concession, the benefit could be neutralised if the Green Tax 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.

According to him, import duties remain one of the major reasons behind the high cost of vehicles in Nigeria, alongside foreign exchange pressures.

He added that the revised policy could help reduce vehicle prices, especially for commercial vehicles where the tariff adjustment is more significant, provided the Green Tax remains relatively low.

“The development is a very good one. There’s no doubt about that. But to know exactly how it will affect prices, we need to know what the Green Tax is. If it is very little, then the reduction in levies will still be significant and consumers will feel the impact,” Ajibola said.

Industry stakeholders said they would continue monitoring the implementation of the fiscal measures as the Nigeria Customs Service rolls out the revised tariff structure.

They noted that clearer details on the Green Tax would ultimately determine whether the reduction in import levies leads to meaningful price relief for vehicle buyers across the country.