FG Cuts Vehicle Import Levies, Dealers Seek Clarity on Green Tax

 

LAGOS — Automobile dealers have welcomed the Federal Government's decision to reduce import levies on vehicles, saying the policy could lower vehicle prices, but stressed that its full impact will depend on the details of the newly introduced Green Tax Surcharge.

The revised import levies, which took effect under the 2026 Fiscal Policy Measures, reduced the levy on new vehicles from 20 per cent to 10 per cent, while the levy on used vehicles was cut from 15 per cent to five per cent.

The Federal Government said the measure is intended to reduce import costs, stimulate economic activity and provide relief to businesses and consumers.

At the same time, the government introduced a Green Tax Surcharge on selected categories of imported vehicles as part of its environmental sustainability agenda. However, industry stakeholders say uncertainty over the size and scope of the surcharge has made it difficult to determine whether the new policy will lead to lower vehicle prices.

Speaking on the development, 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 step but said the benefits would depend on the level of the Green Tax.

According to him, while the reduction in levies on both new and used vehicles is significant, any gains could be offset if the surcharge is substantial.

He explained that if the Green Tax is considerably lower than the reduction in import levies, consumers are likely to benefit from lower vehicle prices. However, he noted that if the surcharge equals or exceeds the amount saved through the levy reductions, the policy would have little practical effect.

Ajibola identified import duties as one of the major factors driving up vehicle prices in Nigeria, alongside the persistent challenges associated with foreign exchange.

He added that commercial vehicles are expected to benefit most from the lower tariffs, provided the Green Tax remains minimal.

Stakeholders said they would continue to monitor the implementation of the revised fiscal measures by the Nigeria Customs Service, expressing hope that greater clarity on the Green Tax would determine whether the policy delivers meaningful price relief for vehicle buyers.