The Federal Government of Nigeria has slashed import levies on both new and used vehicles, effective July 1, 2026, as part of its 2026 Fiscal Policy Measures. The levy on brand-new vehicles dropped from 20% to 10%, while the levy on used vehicles, commonly known as Tokunbo cars, fell from 15% to 5%. Industry operators estimate that these changes could reduce vehicle clearing costs by up to 45%, potentially saving importers more than N700,000 on an average passenger car. For example, clearing a Toyota Camry that previously cost about N4 million is now expected to cost between N3.2 million and N3.3 million under the revised tariff structure.
Dealers Caution Against High Expectations
Despite the optimism, industry stakeholders have warned that Nigerians should not expect an immediate drop in vehicle prices. They cite exchange rate instability, high port charges, and persistent logistics bottlenecks as major cost drivers. Lagos-based car dealer Sunny Madubuko recalled that a similar reduction introduced during former President Muhammadu Buhari's administration failed to make cars more affordable because currency depreciation and other import costs wiped out the expected gains. According to him, while the policy appears positive on paper, consumers may not enjoy substantial price relief because other major import expenses remain unchanged.
Green Tax Reduces Overall Savings
The newly introduced Green Tax Surcharge, implemented alongside the levy reduction, means importers will enjoy only a modest net reduction. Managing Director of Mikky Excellency Nigeria Limited and customs broker, Alhaji Abdulazeez Babatunde Mukaila, disclosed that the government reviewed tariffs on hundreds of imported products, reducing duties on about 127 items while increasing rates on roughly 192 others. He noted that although the levy on Tokunbo vehicles dropped by 10 percentage points, the Green Tax will offset some of the savings. However, he added that the policy would still lower clearing costs, encourage legitimate importation through Nigerian ports, and discourage some forms of vehicle smuggling.
Industry Welcomes Policy, Seeks Broader Reforms
National President of the Association of Motor Dealers of Nigeria (AMDON), Ajibola Adedoyin, described the reduction as significant, saying it would improve affordability and stimulate activities in the automotive sector despite the Green Tax. Former acting National President of the Association of Nigerian Licensed Customs Agents (ANLCA), Dr Kayode Farinto, also praised the government, stating that the decision would ease the burden on consumers by substantially reducing clearing costs. He defended the Green Tax, stressing that it aligns with Nigeria's environmental goals and noted that electric vehicles already enjoy zero import duty under the current policy.
Stakeholders Urge Government to Tackle Structural Issues
National President of the Africa Association of Professional Freight Forwarders and Logistics of Nigeria (APFFLON), Frank Ogunojemite, urged the government to address structural challenges affecting imports. He maintained that tariff reductions alone cannot lower vehicle prices unless exchange rate volatility, logistics costs, terminal handling charges, and port inefficiencies are simultaneously tackled. Stakeholders also urged the government to closely monitor implementation to ensure the benefits of the new policy reach consumers instead of being absorbed by supply chain inefficiencies.
FG Releases Import Prohibition List
Legit.ng earlier reported that the Nigerian government has updated its list of items not allowed to be imported into the country, with cement, soaps, fertiliser, and 14 other goods on the list. The development was announced in a circular issued by the Ministry of Finance and signed by former Minister of Finance and Coordinating Minister of the Economy, Wale Edun, following presidential approval of the 2026 fiscal policy measures. The document, quoted in Punch, stated that the revised measures became effective from April 1, 2026, under the ECOWAS Common External Tariff guidelines.
