FG Cuts Import Tariffs on Used and New Vehicles

The Federal Government has reduced import tariffs on vehicles, lowering duties on used vehicles from 15 percent to 5 percent and on brand-new vehicles from 20 percent to 10 percent.

The Comptroller-General of the Nigeria Customs Service, Adewale Adeniyi, disclosed this while appearing before the House of Representatives Committee on Customs and Excise to defend the service’s 2026 budget proposal.

Adeniyi said the new rates are part of the 2026 fiscal policy measures. According to him, the policy is expected to provide some relief for vehicle importers and Nigerians, although it may reduce Customs revenue from vehicle imports.

He explained that the government also introduced new excise tariff measures under the 2026 fiscal plan, which the service expects will support revenue collection.

However, Adeniyi noted that the sharp reduction in vehicle tariffs could affect income from that category.

“For used vehicles, it has been reduced from 15 percent to 5 percent, and for brand-new vehicles, the tariffs have been reduced from 20 percent to 10 percent,” he told lawmakers.

Lawmakers question impact on imports

During the budget defence, Alex Mascot, a lawmaker from Abia State, asked whether the tariff cut would be enough to stop importers from moving their cargo through neighbouring countries such as Benin Republic.

He said many importers had avoided Nigerian ports because of high import costs.

Responding, Adeniyi said the implementation of the new policy started in May.

The chairman of the committee, Leke Abejide, described the tariff reduction as a welcome development for Nigerians. He said the policy showed that the government was responding to public concerns over the cost of importing vehicles.

According to him, Nigerians had been calling for a reduction in vehicle import duties, and the new policy should be commended.

Customs exceeds 2025 revenue target

Adeniyi also told lawmakers that the Nigeria Customs Service generated N7.258 trillion between January and December 2025.

He said the figure exceeded the approved revenue target by N1.153 trillion, representing an 18.89 percent increase above the target for the year.

The Customs boss said the performance was recorded despite several policies and economic factors that reduced revenue collection.

He listed some of the challenges as the suspension of excise duty on telecommunications services, the continued suspension of the proposed green tax introduced in 2023, and fiscal policies designed to support local production of healthcare products.

He said these policies reduced import duty and VAT collections from some categories of goods.

Adeniyi also mentioned the Presidential Initiative on Compressed Natural Gas and electric vehicles, which affected revenue from imports.

He added that many imports entered the country under import duty exemptions, VAT orders and other concessionary arrangements.

According to him, imports worth N34.538 trillion qualified for revenue concessions in 2025. Petroleum products accounted for 56.40 percent of the concessions, military imports accounted for 40.52 percent, while import duty exemption certificates and other items made up 3.08 percent.

He also said global trade disruptions linked to the Russia-Ukraine war affected some imports, especially wheat shipments from the region.

Customs targets N11.07tn in 2026

For the 2026 fiscal year, Adeniyi said the Nigeria Customs Service has a revenue target of N11.074 trillion.

He explained that the target includes N5.542 trillion for the federation, N1.491 trillion for non-federation revenue, N2.773 trillion from import VAT and N1.266 trillion from free-on-board collections.

To meet the target, Adeniyi said Customs would fully deploy the Unified Customs Information System, also known as B’Odogwu, to automate operations and improve revenue collection.

He said the service would also strengthen post-clearance audits, real-time system audits, trade compliance checks, border patrols and collaboration with relevant stakeholders.

Other planned measures include expanding the Authorised Economic Operator programme and advance rulings system to support trade facilitation.

Adeniyi said the new excise tariff regime, the proposed return of the green tax and other fiscal measures are expected to support revenue collection in 2026.

However, he warned that global trade uncertainties, including tensions involving the United States, Israel and Iran, could still affect import activity.

N1.235tn expenditure proposed

For its 2026 expenditure plan, the Nigeria Customs Service proposed a budget of N1.235 trillion.

Adeniyi said the budget would be funded through N949.86 billion from the four percent free-on-board allocation, N55.47 billion from its two percent VAT share and N230.04 billion for ongoing capital projects.

He said the proposed spending would cover N421.70 billion for personnel costs, N307.77 billion for overheads and N565.93 billion for capital projects.