FG reduces tariffs on vehicles, palm oil, sugar under new fiscal policy

THE federal government has rolled out the 2026 fiscal policy measures (FPM), introducing sweeping tariff adjustments across key sectors of the economy, according to The Cable.

Details contained in a circular dated April 1, 2026, and signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, indicate that the latest policy framework replaces the 2023 FPM.

As part of the reforms, authorities approved a revised national schedule covering 127 tariff lines, with lower import duties aimed at boosting activity in priority sectors.

Under the new structure, the import adjustment tax on crude palm oil has been reduced to an effective rate of 28.75 percent, reflecting a cut from earlier higher levels.

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In the automotive segment, tariffs on fully built passenger cars, four-wheel-drive vehicles, and station wagons have been lowered to 40 percent, compared to the 70 percent rate under the 2015 policy.

To ease the transition, importers who processed Form ‘M’ before April 1 have been granted a 90-day window to clear goods using the previous rates.

The government also disclosed that a revised excise duty framework, alongside a green tax surcharge, will come into force from July 1, 2026.

The updated tariff schedule spans a wide range of goods. Anti-malarial drugs now carry a 20 percent duty, while rice imports attract 47.5 percent, down from 70 percent. Broken rice has been adjusted to 30 percent, also reduced from 70 percent, while wheat flour remains at 70 percent.

Crude palm oil duties now stand at 28.75 percent, down from 35 percent, while margarine is fixed at 40 percent. Various categories of sugar, including raw cane, beet sugar, and granulated forms, have been reduced to between 55 percent and 57.5 percent from 70 percent. Refined salt has similarly been cut to 55 percent.

For manufactured goods, envelopes now attract 40 percent duty, while notebooks and diaries have been reduced to 30 percent. Ceramic products, including tiles and cubes, now fall within a 35 to 46.25 percent range, depending on type.

In the metals segment, duties on several steel products, including zinc-coated sheets, aluminium-coated coils, and plated steel, have been lowered to 35 percent from 45 percent. Hot-rolled steel bars and rods also now attract 35 percent, while cold-rolled steel with low carbon content is pegged at 15 percent.

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Electrical components such as fuses now carry 10 percent duty, down from 20 percent. Selected industrial and transport equipment, including railway locomotives, cargo ships, and certain machinery, will attract zero duty, compared to previous 5 percent rates.

Medical and industrial equipment also saw reductions, with modular surgical theatres now at 5 percent from 20 percent, and air compressors at 5 percent from 10 percent. Circuit breakers and lamp holders have been adjusted to 10 percent.

The policy further outlines exemptions from the green tax surcharge, covering vehicles with engine capacity below 2000cc, mass transit buses, electric vehicles, and locally manufactured automobiles across specified categories.