The Federal Government’s revised vehicle import levy regime has officially taken effect, sparking hopes that Nigerians could soon see lower automobile prices. However, stakeholders in the automotive industry say uncertainty surrounding the newly introduced Green Tax makes it too early to predict the policy’s real impact on consumers.
The new measures, introduced under the 2026 Fiscal Policy framework, significantly reduce import levies on both new and used vehicles. Under the revised structure, the import levy on brand-new vehicles has been cut from 20 per cent to 10 per cent, while the levy on used vehicles has been reduced from 15 per cent to five per cent.
The government says the changes are aimed at reducing import costs, encouraging economic activity and easing the burden on businesses and consumers operating within Nigeria’s automotive sector.
Alongside the levy reductions, authorities also introduced a Green Tax surcharge on selected categories of imported vehicles as part of efforts to promote environmental sustainability and cleaner transportation practices.
While the levy cuts have been welcomed by industry players, many say the lack of clarity surrounding the Green Tax has made it difficult to assess whether the new policy will actually translate into lower vehicle prices.
Speaking to Vanguard, President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, described the levy reduction as a positive step but cautioned that the final outcome would depend on the size of the new surcharge.
“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,” he said.
According to Ajibola, the reduction in import levy for used vehicles represents a significant concession from the government. However, he warned that the benefits could be eroded if the Green Tax is set at a level that offsets the savings generated by the levy 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.
He noted that import duties remain one of the major factors driving up vehicle prices in Nigeria, alongside the continued challenges posed by foreign exchange volatility.
Ajibola added that the revised tariff regime could eventually lead to lower vehicle prices, particularly in the commercial vehicle segment where the adjustments are more substantial. However, he stressed that this outcome would largely depend on how the Green Tax is implemented.
“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,” he said.
The policy has generated considerable interest among importers, dealers and prospective vehicle buyers, many of whom are hoping the reduced levies will make automobiles more affordable in a market where rising costs have placed vehicle ownership beyond the reach of many Nigerians.
Industry stakeholders say they will closely monitor the rollout of the new tariff structure by the Nigeria Customs Service in the coming weeks.
According to them, the success of the policy and its effect on vehicle prices will ultimately depend on the details of the Green Tax and how it interacts with the newly reduced import levies.
For now, while the lower levy rates have been welcomed as a potentially positive development, auto dealers insist that a clearer understanding of the Green Tax is necessary before determining whether Nigerian consumers will experience meaningful relief in vehicle prices.
