Cost of Cars to Get Cheaper As FG Approves Tariff Cut in New Policy
- The FG has decided to reduce the tariff on imported passenger vehicles to 40% from 70%
- NBS data shows that passenger car imports rose to N1.58 trillion in 2025, up 24.64% YoY
- United States remains the dominant source of passenger vehicles, followed by the UAE
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The federal government has reduced import tariffs on vehicles to 40% from 70%, a move expected to lower the cost of bringing cars into Nigeria.
The new policy, contained in a circular signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, replaces the 2023 fiscal guidelines and takes effect immediately on April 1, 2026.
Source: Getty Images
The new rate applies to passenger cars, four-wheel-drive vehicles and station wagons, marking one of the most significant changes in Nigeria’s auto import policy in recent years.
New policy to get cheaper
The tariff reduction is expected to reduce the landing cost of imported vehicles, potentially translating into lower retail prices for consumers, depending on exchange rates and dealer margins, the Nation reports.
In addition, the government is to introduce a Green Tax Surcharge scheduled to begin on July 1, 2026.
However, the government provided exemptions under the green tax policy.
Vehicles with engine capacity below 2000cc, mass transit buses, electric vehicles and locally manufactured auto components will not be subject to the surcharge, a move seen as encouraging cleaner transportation and local production.
To ensure a smooth transition, the government granted a 90-day grace period for importers who initiated transactions before April 1.
Such importers will be allowed to clear their vehicles under the old tariff rates, provided they have valid Form ‘M’ documentation and irrevocable trade agreements.
The minister said:
“A grace period of ninety days commencing from the date of this circular is hereby granted to all importers, manufacturers, and service providers.”
The government added that the new measures would be formally published in the official gazette and are expected to support economic activity across the automotive value chain.
Source: Getty Images
Car importation in 2025
The policy comes as Nigeria records a recovery in passenger car imports.
Data from the National Bureau of Statistics shows that imports of passenger vehicles rose to N1.58 trillion in 2025, marking a 24.64% increase from N1.26 trillion in 2024.
On a two-year basis, passenger car imports grew by 6.89% compared to N1.47 trillion recorded in 2023.
Despite the growth, passenger vehicles accounted for just 2.34% of Nigeria’s total imports of N67.35 trillion in 2025, suggesting that consumer car purchases remain a relatively small share of overall import activity.
A breakdown of the data shows that Nigeria’s passenger vehicle market remains heavily dependent on imports, particularly from the United States, which dominates the used car segment.
Other countries, including the United Arab Emirates, the United Kingdom, Canada and Belgium, contributed smaller shares
FG’s port charge waiver could slash cost of food
Legit.ng earlier reported that the Federal Government has approved a waiver of demurrage charges on more than 10,000 containers stranded at Nigerian ports, raising hopes of a possible drop in the prices of food, vehicles, and other imported goods.
The intervention comes amid delays linked to the rollout of the National Single Window (NSW) platform, a digital system designed to streamline cargo clearance and improve trade efficiency.
Source: Legit.ng
