FG Begins Green Tax Collection: 5 Key Things Every Nigerian Should Know
- The federal government has begun implementing the Green Tax Surcharge on selected imported vehicles
- Imported vehicles with larger engine capacities will attract a 2% or 4% Green Tax, depending on engine size
- Electric vehicles, mass transit buses and locally manufactured vehicles are exempt from the new environmental levy
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 is implementing a new environmental tax called the Green Tax Surcharge on certain imported vehicles through the Nigeria Customs Service (NCS) as part of its strategy to mitigate carbon emissions and promote sustainable transportation.
The tax, which went into effect on Wednesday, July 1, 2026, is one of several measures in the 2026 Fiscal Policy Measures designed to achieve environmental sustainability goals while promoting environmentally friendly vehicles.
Source: Getty Images
Here are five key details every Nigerian needs to be aware of regarding this new tax:
Green Tax Effective July 1, 2026
The federal government has started applying a Green Tax Surcharge to the importation of high-engine-capacity motor vehicles aimed at curbing carbon emissions, BusinessDay reports.
Higher-engine-capacity vehicles to be affected
The new surcharge will apply only to imported vehicles with larger engine capacities.
Vehicles with engine capacities between 2,000cc and 3,999cc will attract a 2% Green Tax Surcharge, while imported vehicles with engines of 4,000cc and above will pay a 4% surcharge.
The policy is designed to discourage the importation of vehicles that generate higher carbon emissions.
Electric vehicles and buses exempted
The Green Tax surcharge will not apply to electric motor vehicles, buses and other mass transit vehicles, as well as vehicles that are produced locally.
Green Tax to be separately assessed
The Nigeria Customs Service said that the surcharge would be separately assessed from the existing duties, through the submission of a different HS Code Declaration in its systems to ensure transparency and uniform implementation across all Customs commands.
Sensitisation ongoing on the Green Tax
Ahead of the July 1 rollout, the agency carried out nationwide sensitisation programmes for customs agents, freight forwarders, importers and other stakeholders to ensure they understand the policy and comply with the new requirements.
The Green Tax Surcharge represents one of Nigeria's most significant environmental tax reforms in recent years, with the federal government hoping it will encourage the use of cleaner vehicles while supporting the country's climate and sustainability objectives.
Source: Getty Images
Vehicle import duty slashed
Earlier, Legit.ng reported that in a directive that took effect on July 1, the implementation of the green tax, the Nigeria Customs Service (NCS) confirmed that import duty on brand-new vehicles has been reduced from 20% to 10%.
For used vehicles, popularly known as Tokunbo, the duty has been cut even more sharply, from 15 per cent to five per cent.
The policy, announced on Monday, June 29, follows an approval by the Federal Ministry of Finance and is expected to moderate the impact of the new environmental levy on affected vehicles
Source: Legit.ng
