The federal government has reduced import duties on both new and used vehicles under its 2026 fiscal policy measures, as disclosed by the Comptroller-General of the Nigeria Customs Service (NCS), Adewale Adeniyi.

Mr. Adeniyi announced the tariff review on Monday while defending the service’s 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

He stated that the import duty on used vehicles has been lowered from 15 per cent to 5 per cent, whilst the rate for brand-new vehicles has been cut from 20 per cent to 10 per cent. This revised tariff regime, part of the government’s broader fiscal policy for 2026, is expected to support economic activity but could reduce customs revenue from vehicle imports.

“We have the new excise tariff, which is provided in the 2026 fiscal policy. We believe that these measures will increase our revenue collection,” Mr. Adeniyi told the lawmakers. He added that the reduction in vehicle tariffs may also negatively affect revenue.

Lawmakers React to Tariff Changes

During the session, Alex Mascot (Abia State) questioned whether the reduction would be sufficient to discourage importers from diverting cargo through neighbouring ports, particularly Cotonou. He argued that high import charges had long pushed many traders to clear their goods outside Nigeria and urged the Customs Service to assess the new policy’s effectiveness.

Responding, Mr. Adeniyi said implementation of the revised tariff structure commenced in May. Chairman of the committee, Leke Abejide (APC, Kogi), welcomed the policy, describing it as a positive step for Nigerians and commending President Bola Tinubu’s administration for approving the reduction.

2025 Budget Performance and Revenue Constraints

Mr. Adeniyi also presented the NCS 2025 revenue performance, revealing that the service generated 7.258 trillion between January and December, surpassing its approved target. This figure exceeded the annual target by 1.153 trillion, representing an 18.89 per cent increase.

Despite the strong performance, several government policies constrained revenue collection during the year. These included the suspension of excise duty on telecommunications services, the continued suspension of the proposed green tax introduced in 2023, and fiscal incentives encouraging local production of healthcare products, which reduced customs duty and Value Added Tax (VAT) collections on imported medical items.

He added that the presidential initiative promoting Compressed Natural Gas (CNG) and electric vehicles also reduced revenue from imports in those sectors. Revenue was further affected by the large volume of imports granted concessions through Import Duty Exemption Certificates (IDEC), VAT orders, and Schedule II of the Common External Tariff (CET).

Mr. Adeniyi disclosed that imports valued at 34.538 trillion benefited from various revenue waivers in 2025. Petroleum products accounted for 56.40 per cent of the concessions, military imports made up 40.52 per cent, whilst IDEC and other qualifying imports represented the remaining 3.08 per cent. He also cited disruptions to global trade caused by the Russia-Ukraine war, particularly its impact on wheat imports into Nigeria.

Customs Projects 11.074tn Revenue in 2026

Looking ahead, the Customs Service is targeting 11.074 trillion in revenue for the 2026 fiscal year. Mr. Adeniyi said the projection comprises 5.542 trillion for the federation account, 1.491 trillion in non-federation revenue, 2.773 trillion from import VAT, and 1.266 trillion from free-on-board (FOB) collections.

To achieve the target, the service plans to accelerate the deployment of the Unified Customs Information System (UCIS), also known as B’Odogwu, to automate customs operations and improve efficiency. Other strategies include expanding post-clearance and real-time audits, extending the Authorised Economic Operator (AEO) and advance rulings programmes, deploying geospatial technology and joint border patrols, and deepening engagement with stakeholders.

Mr. Adeniyi added that the implementation of the new excise tariff regime, the planned reintroduction of the green tax, and other fiscal measures would strengthen revenue generation despite uncertainties in global trade arising from geopolitical tensions involving the United States, Israel, and Iran.

Proposed Expenditure for 2026

The Customs Service is proposing an expenditure of 1.235 trillion for the 2026 fiscal year. According to Mr. Adeniyi, the budget will be financed through 949.86 billion from the four per cent FOB allocation, 55.47 billion from its two per cent share of VAT revenue, and 230.04 billion earmarked for ongoing capital projects.

The proposed spending includes 421.70 billion for personnel costs, 307.77 billion for overheads, and 565.93 billion for capital expenditure.