The Federal Government has commenced the implementation of a downward review of import levies on vehicles, a policy expected to ease the burden of vehicle importation and, ultimately, provide some relief to consumers grappling with rising transportation costs.

Under the new fiscal measures, the import levy on new vehicles has been reduced from 20 per cent to 10 per cent, while the levy on used vehicles, popularly known as Tokunbo, has been slashed from 15 per cent to 5 per cent.

The policy, which took effect on July 1, 2026, forms part of the government’s broader fiscal reforms aimed at lowering the cost of doing business, encouraging trade, and improving access to vehicles for individuals and businesses.

The Nigeria Customs Service confirmed that the revised levy regime is now in force, noting that the initiative aligns with the Federal Government’s commitment to creating a more business-friendly environment while stimulating economic activities across the automotive value chain.

However, the implementation also introduces a Green Tax on certain categories of imported vehicles with higher engine capacities as part of efforts to promote cleaner energy and environmental sustainability. Electric vehicles and some mass-transit vehicles are exempt from the surcharge.

Industry observers believe the reduction in import levies could moderate vehicle prices if importers fully pass on the benefits to buyers. They, however, caution that exchange rate fluctuations, shipping costs, port charges, and other operational expenses will continue to influence the final retail prices of vehicles in the Nigerian market.

The latest policy is expected to be closely monitored by stakeholders in the automotive industry, transport operators, and consumers, many of whom have long advocated measures to make vehicle ownership and transportation more affordable.