The Federal Government has reduced import duties on both new and used vehicles while simultaneously introducing a Green Tax Surcharge on larger-engine cars, creating a mixed outcome for Nigerian car buyers. Effective July 1, 2026, Customs duty on new vehicles has been halved from 20% to 10%, and on used vehicles from 15% to 5%, according to a directive from the Ministry of Finance.
New Green Tax Surcharge Targets Bigger Engines
The Green Tax Surcharge applies to imported vehicles with engines above 2,000cc. Vehicles with engines between 2,000cc and 3,999cc will attract a 2% levy, while those with engines of 4,000cc and above will pay 4%. This policy aims to reduce carbon emissions by discouraging the importation of high-emission vehicles. The Nigeria Customs Service (NCS) confirmed that the surcharge took effect on July 1, 2026.
National Public Relations Officer of the NCS, Abdulahi Maiwada, clarified that certain vehicles are exempt: "This policy excludes mass transit buses, electric vehicles (EVs), and locally manufactured vehicles are excluded from this green charge surcharge. The vehicles that are to pay are those that are above 2,000cc."
Impact on Popular SUV and Performance Car Models
Many popular SUVs in Nigeria, including the Toyota Land Cruiser, Mercedes-Benz GLE, and Volvo XC90, as well as some pickup trucks, fall within the engine range subject to the new tax. Performance vehicles like the Porsche 911 and Honda Civic Type R are also affected. This means that while the duty reduction offers some relief, the additional surcharge could offset savings for buyers of larger-engine vehicles.
The duty reduction follows an earlier tariff cut in April 2026, when the government reduced tariffs on fully built passenger vehicles from 70% to 40% as part of a broader review of Nigeria's automotive import policy.
Other Levies Still Apply Despite Duty Cut
Importing a vehicle into Nigeria involves multiple charges beyond Customs duty. Importers also pay a 7% surcharge calculated on the duty, a 15% National Automotive Council levy, 7.5% Value Added Tax (VAT), and, where applicable, a 0.5% ECOWAS Trade Liberalisation Scheme levy for qualifying vehicles from West Africa. These additional costs mean that the final price of imported cars may not drop significantly despite the duty reduction.
Murtala Muazu, Comptroller in charge of Tariff, System Audit and Coordination at the NCS, explained that the Green Tax Surcharge is distinct from existing charges and will be assessed separately. Implementation will be carried out through the HS Code declaration platform, with awareness campaigns underway at Customs zonal headquarters to prepare importers and clearing agents.
Mixed Implications for Nigerian Car Buyers
For Nigerians hoping for immediate price drops, the reality is more complex. While the duty cut reduces costs, the new green tax and existing levies mean that the landing cost of many vehicles, especially SUVs and performance cars, could remain high. However, buyers of electric vehicles, locally assembled cars, and mass transit buses will benefit from exemptions, potentially making these options more attractive.
The policy reflects the government's dual objectives of stimulating the automotive market and promoting environmental sustainability. As the NCS continues to roll out the new system, importers and consumers must navigate the changing landscape to understand the true cost of importing a vehicle into Nigeria.
