FG Cuts Tariffs On Imported Vehicles

The Federal Government has reduced import tariffs on vehicles, lowering the rate for used vehicles from 15 per cent to five per cent and for brand-new vehicles from 20 per cent to 10 per cent.

The Comptroller-General of the Nigeria Customs Service (NCS), Adewale Adeniyi, disclosed this while defending the agency’s 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

He explained that the revised vehicle tariffs form part of the 2026 fiscal policy measures introduced by the Federal Government. According to him, the changes are expected to support revenue generation in some areas, although the reduction in vehicle import tariffs could reduce earnings from that source.

Adeniyi said the government believes the overall fiscal measures would strengthen Customs revenue, even though the lower tariffs on vehicles may affect collections.

During the budget session, a member of the committee, Alex Mascot from Abia State, questioned whether the reduction would be enough to stop importers from taking their cargo through neighbouring ports, especially Cotonou. He noted that many traders have avoided Nigerian ports because of the high cost of import duties.

In response, Adeniyi said the implementation of the revised tariff policy started in May.

Chairman of the House Committee on Customs and Excise, Leke Abejide, described the reduction as a welcome development for Nigerians. He said many people had demanded lower import charges for vehicles and commended the Federal Government and President Bola Ahmed Tinubu for approving the review.

The Customs boss also informed lawmakers that the service generated N7.258 trillion in revenue between January and December 2025, exceeding its approved target by N1.153 trillion, representing an increase of 18.89 per cent.

He said the revenue performance was achieved despite several challenges that affected collections during the year. These included the suspension of excise duty on telecommunications services, the continued suspension of the proposed Green Tax introduced in 2023, and government policies encouraging local production of healthcare products, which reduced import duties and Value Added Tax (VAT) collections on medical imports.

Adeniyi also noted that the government’s push for compressed natural gas (CNG) vehicles and electric vehicles reduced Customs revenue from vehicle imports. He added that many imported goods also benefited from import duty exemption certificates (IDEC), VAT orders and Schedule II of the Common External Tariff (CET).

According to him, imports valued at N34.538 trillion received revenue concessions in 2025. Petroleum products accounted for 56.40 per cent of the concessions, military imports represented 40.52 per cent, while IDEC and other items made up the remaining 3.08 per cent.

He further said international trade was affected by the Russia-Ukraine war, particularly the supply of wheat from the region, which also influenced import activities.

Looking ahead, Adeniyi disclosed that the Nigeria Customs Service has been given a revenue target of N11.074 trillion for the 2026 fiscal year.

He explained that the target consists of N5.542 trillion for the Federation Account, N1.491 trillion in non-federation revenue, N2.773 trillion from import VAT and N1.266 trillion from free-on-board (FOB) collections.

To meet the target, the service plans to fully deploy the Unified Customs Information System (UCIS), also known as B’Odogwu, to automate Customs operations and improve revenue collection.

Other strategies include strengthening post-clearance audits and real-time system checks to improve compliance, expanding the Authorised Economic Operator (AEO) and advance rulings programmes to ease trade, deploying geospatial technology alongside joint border patrols to tackle smuggling, and improving collaboration with stakeholders.

Adeniyi added that the new excise tariff regime, the planned return of the Green Tax and other fiscal measures are expected to improve revenue generation despite uncertainties in global trade caused by tensions involving the United States, Israel and Iran.

For the 2026 fiscal year, the Customs Service proposed an expenditure budget of N1.235 trillion. The budget will be financed through N949.86 billion from the four per cent FOB allocation, N55.47 billion from its two per cent VAT share and N230.04 billion allocated for ongoing capital projects.

He said the proposed spending includes N421.70 billion for personnel costs, N307.77 billion for overhead expenses and N565.93 billion for capital projects.