The Federal Government has reduced import tariffs on both used and brand-new vehicles as part of its 2026 fiscal policy, a move aimed at easing the cost of vehicle imports and stimulating trade.
The Comptroller-General of the Nigeria Customs Service (NCS), Adewale Adeniyi, disclosed the policy shift on Tuesday while defending the agency’s 2026 budget proposal before the House of Representatives Committee on Customs and Excise.
According to Adeniyi, import duties on used vehicles have been reduced from 15 per cent to five per cent, while tariffs on brand-new vehicles have been cut from 20 per cent to 10 per cent.
He explained that the revised rates form part of the Federal Government’s new fiscal policy measures for 2026, adding that although the changes are expected to encourage trade and improve economic activity, they may reduce Customs revenue from vehicle imports.
“The new excise tariff is contained in the 2026 fiscal policy. We believe these measures will improve our revenue collection generally. However, tariffs and levies on vehicles have been reduced significantly. Used vehicles now attract five per cent instead of 15 per cent, while brand-new vehicles now attract 10 per cent instead of 20 per cent. This could negatively affect revenue from that segment,” Adeniyi said.
Lawmakers Raise Concerns Over Cargo Diversion
During the budget defence, a member of the committee representing Abia State, Alex Mascot, questioned whether the tariff reduction would be sufficient to discourage importers from diverting cargo through neighbouring countries, particularly the Republic of Benin.
The lawmaker noted that many importers still prefer ports in Cotonou because they consider Nigerian import charges too high.
Responding, Adeniyi revealed that implementation of the revised tariff regime commenced in May, expressing optimism that the policy would improve the competitiveness of Nigerian ports over time.
Committee Hails Policy as Relief for Nigerians
Chairman of the House Committee on Customs and Excise, Leke Abejide, welcomed the reduction, describing it as a major relief for Nigerians struggling with high vehicle costs.
He commended the Federal Government and President Bola Ahmed Tinubu for approving the measure, saying many Nigerians had long advocated lower import duties on vehicles.
According to him, the tariff review demonstrates the government’s commitment to addressing public concerns and making imported vehicles more affordable.
Customs Exceeds 2025 Revenue Target
Adeniyi also informed lawmakers that the Nigeria Customs Service surpassed its revenue target for 2025 despite several economic challenges.
He disclosed that the agency generated ₦7.258 trillion between January and December 2025, exceeding its approved target by ₦1.153 trillion, representing an 18.89 per cent positive variance.
He attributed the achievement to improved operational efficiency despite policies that reduced potential revenue collections.
Among the factors affecting revenue, he listed the suspension of excise duty on telecommunications services, continued suspension of the proposed Green Tax introduced in 2023, and fiscal incentives designed to encourage local production of healthcare products, which lowered import duty and VAT collections on medical imports.
The Customs boss also cited the Presidential Compressed Natural Gas (CNG) and Electric Vehicle initiative, which reduced import-related revenue, as well as extensive import duty waivers granted under Import Duty Exemption Certificates (IDEC), VAT orders and Schedule II of the Common External Tariff (CET).
According to him, imports valued at ₦34.538 trillion qualified for revenue concessions in 2025. Of that figure, petroleum products accounted for 56.40 per cent, military imports represented 40.52 per cent, while IDEC and other exempted imports made up 3.08 per cent.
He further noted that disruptions in global trade caused by the Russia-Ukraine conflict affected wheat imports into Nigeria, thereby impacting Customs revenue.
Customs Targets ₦11.07tn Revenue in 2026
For the 2026 fiscal year, the Nigeria Customs Service has set a revenue target of ₦11.074 trillion.
Adeniyi said the projection comprises:
- ₦5.542 trillion for Federation revenue.
- ₦1.491 trillion for non-Federation revenue.
- ₦2.773 trillion from import VAT.
- ₦1.266 trillion from Free-On-Board (FOB) collections.
To achieve the target, the Service plans to fully deploy the Unified Customs Information System (UCIS), known as B’Odogwu, to automate customs operations and improve revenue collection.
Other strategies include strengthening post-clearance audits and real-time compliance monitoring, expanding the Authorised Economic Operator (AEO) programme, enhancing advance rulings for importers, deploying geospatial technology to combat smuggling, conducting joint border patrols, and improving collaboration with stakeholders.
Adeniyi also said the proposed reintroduction of the Green Tax, alongside other fiscal measures under the 2026 policy framework, is expected to support revenue generation despite uncertainties in global trade arising from geopolitical tensions involving the United States, Israel and Iran.
₦1.24tn Budget Proposed for Customs
The Comptroller-General further presented a proposed expenditure budget of ₦1.235 trillion for the 2026 fiscal year.
He explained that the budget would be financed through:
- ₦949.86 billion from the four per cent FOB allocation.
- ₦55.47 billion from the agency’s two per cent VAT share.
- ₦230.04 billion earmarked for ongoing capital projects.
The proposed spending includes ₦421.70 billion for personnel costs, ₦307.77 billion for overhead expenses, and ₦565.93 billion for capital projects aimed at modernising Customs operations and strengthening border management.
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