Customs: Nigeria cuts import tariff on used vehicles to 5%, new vehicles to 10%

THE Nigerian government has reduced the import tariff on used vehicles from 15 percent to 5 percent and lowered the duty on brand-new vehicles from 20 percent to 10 percent, according to the Comptroller-General of the Nigeria Customs Service (NCS), Mr Adewale Adeniyi.

Adeniyi disclosed this on Monday while defending the NCS’ 2026 budget proposal before the House of Representatives Committee on Customs and Excise. He explained that the revised vehicle tariffs form part of the 2026 Fiscal Policy Measures (FPM).

According to the customs chief, the broader fiscal policy is expected to strengthen revenue generation, although the reduction in vehicle import duties could reduce collections from that segment.

“We have the new excise tariff, which is provided in the 2026 fiscal policy. We believe that these measures will increase our revenue collection,” Adeniyi said.

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He added that tariffs and levies on vehicles had been reduced significantly, with used vehicle duties cut from 15 percent to 5 percent and those on new vehicles reduced from 20 percent to 10 percent, noting that the adjustment could negatively affect customs revenue.

During the session, a lawmaker representing Abia State, Alex Mascot, questioned whether the reduced tariffs would be sufficient to discourage importers from diverting cargo through neighbouring countries such as Cotonou (Benin). He argued that many importers avoid Nigerian ports because of high import charges.

In response, Adeniyi told lawmakers that implementation of the revised tariff regime commenced in May.

Chairman of the committee, Leke Abejide, described the policy as a positive development for Nigerians, saying the government had responded to public demands for lower import duties. He commended President Bola Ahmed Tinubu for approving the measure.

Customs exceeded 2025 revenue target

Adeniyi also informed the committee that the Nigeria Customs Service (NCS) generated N7.258 trillion between January and December 2025, surpassing its approved revenue target by N1.153 trillion, representing a positive variance of 18.89 percent.

He attributed the performance to the agency’s revenue efforts despite several headwinds, including the suspension of excise duty on telecommunications services, the continued suspension of the proposed green tax introduced in 2023, and fiscal incentives aimed at boosting local production of healthcare products, which reduced import duty and VAT collections on medical imports.

The comptroller-general further said the presidential initiative promoting compressed natural gas (CNG) and electric vehicles also reduced customs revenue, alongside the large volume of imports covered by Import Duty Exemption Certificates (IDEC), VAT orders and Schedule II of the Common External Tariff (CET).

According to him, imports valued at N34.538 trillion qualified for revenue concessions in 2025, comprising 56.40 percent petroleum products, 40.52 percent military imports and 3.08 percent IDEC-related and other imports.

He added that global trade disruptions caused by the Russia-Ukraine war also affected import volumes, particularly wheat shipments from the region.

N11.07tn revenue target for 2026

Looking ahead, Adeniyi said the service has been assigned a revenue target of N11.074 trillion for the 2026 fiscal year.

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He explained that the projection comprises N5.542 trillion for the federation, N1.491 trillion in non-federation revenue, N2.773 trillion from import VAT and N1.266 trillion from free-on-board (FOB) collections.

To meet the target, the Customs 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 and real-time systems audits to improve compliance, expanding the Authorised Economic Operator (AEO) and advance rulings programmes to facilitate trade, deploying geospatial technology alongside joint border patrols to tackle smuggling, and deepening collaboration with stakeholders.

Adeniyi added that the revised excise tariff regime, the planned reintroduction of the green tax and other fiscal measures are expected to boost revenue generation despite uncertainties in global trade arising from geopolitical tensions involving the United States, Israel and Iran.

For the 2026 fiscal year, the Customs Service proposed an expenditure budget of N1.235 trillion, to be financed with N949.86 billion from the 4 percent FOB allocation, N55.47 billion from its two percent VAT share and N230.04 billion earmarked for ongoing capital projects.

He said the proposed spending includes N421.70 billion for personnel costs, N307.77 billion for overheads and N565.93 billion for capital projects.