The revised vehicle import levy framework introduced by Nigeria’s federal government has started operating, with dealers and motorists hoping it will translate into cheaper cars. Yet auto retailers are pressing for immediate clarity on a new “Green Tax” surcharge, warning that the final cost to buyers will hinge on how that environmental levy is structured and priced.
What the new import levy rules change
- The government’s updated vehicle import policy has officially taken effect under the 2026 Fiscal Policy Measures.
- For brand-new vehicles, the import levy has been cut from 20% to 10%.
- For used vehicles, the import levy has been reduced from 15% to 5%.
- The stated goal of the changes is to lower import-related costs, support broader economic activity, and ease the burden on both businesses and consumers within the automotive market.
- Alongside the levy reductions, the policy also introduces a Green Tax surcharge applied to selected categories of imported vehicles as part of the government’s environmental sustainability agenda.
While the levy cuts are widely viewed as a step toward reducing vehicle prices, industry participants say uncertainty around the Green Tax’s exact design and financial impact is clouding expectations. Dealers argue that without knowing the surcharge level, it is difficult to estimate whether shoppers will actually pay less at the point of purchase.
Dealers seek details on the Green Tax before projecting price drops
Prince Ajibola, President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, said the reduced levies are a positive development but that any benefit to consumers could be diluted depending on the Green Tax amount.
He said the key unknown is the size of the surcharge and how it will apply after the levy reductions. “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 in an interview with Vanguard.
Ajibola also pointed out that the reduction on used vehicles—from 15% to 5%—is a major concession. However, he warned that the advantage might be offset if the Green Tax is set at a level comparable to, or higher than, the savings created by the tariff cuts. “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.
In his view, import duties are not the only driver of high vehicle prices. He cited foreign exchange pressures as another major factor pushing up costs in Nigeria’s vehicle market, even when tariff levels move.
He added that the updated policy could still help reduce prices—particularly for commercial vehicles—where the tariff adjustment is more pronounced, so long as 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.
Next steps: customs rollout and continued monitoring
Automotive stakeholders said they will continue to watch how the fiscal measures are implemented as the Nigeria Customs Service rolls out the revised tariff schedule. They stressed that the clarity and pricing details of the Green Tax will ultimately determine whether the reduction in import levies results in meaningful affordability gains for vehicle buyers across the country.
