FG Cuts Vehicle Import Duty, Customs Eyes N11tn Revenue Target

• Used vehicle import duty drops from 15% to 5%, while new vehicle tariff falls from 20% to 10%.

• Customs says lower tariffs may reduce revenue but broader fiscal measures will boost collections.

• Service targets over N11 trillion revenue in 2026 after exceeding last year’s goal.

The Federal Government has slashed import tariffs on vehicles in a move aimed at easing the cost of vehicle imports, even as the Nigeria Customs Service (NCS) projects more than N11 trillion in revenue for the 2026 fiscal year.

Comptroller-General of Customs, Adewale Adeniyi, disclosed the new tariff regime on Monday while defending the agency’s 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

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Under the revised fiscal policy, import duty on used vehicles has been reduced from 15 per cent to five per cent, while tariffs on brand-new vehicles have been cut from 20 per cent to 10 per cent.

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Adeniyi said the adjustments form part of the Federal Government’s 2026 fiscal measures designed to improve trade and stimulate economic activities, although the lower tariffs could affect customs earnings from vehicle imports.

According to him, the service expects the new excise framework and other fiscal reforms to support overall revenue generation despite the anticipated decline from vehicle duties.

“We have a new excise tariff regime under the 2026 fiscal policy, which we believe will strengthen revenue generation. However, the reduction in tariffs on both used and new vehicles may have some impact on collections from that segment,” he told lawmakers.

The Customs boss explained that implementation of the revised tariff structure commenced in May.

During the session, lawmakers questioned whether the reduced import charges would discourage importers from diverting cargo through neighbouring ports, particularly the Port of Cotonou in Benin Republic.

Responding, Adeniyi said the policy was expected to make Nigerian ports more competitive while complementing broader trade reforms.

Chairman of the committee, Leke Abejide, welcomed the tariff reduction, describing it as a positive intervention that would ease the burden on Nigerians seeking to import vehicles.

He commended President Bola Tinubu for approving the measure, noting that many Nigerians had long advocated lower import charges on automobiles.

Adeniyi also revealed that the Nigeria Customs Service generated N7.258 trillion between January and December 2025, surpassing its approved revenue target by N1.153 trillion, representing an 18.89 per cent increase.

He attributed the performance to improved operational efficiency despite challenges such as the suspension of excise duties on telecommunications services, tax waivers on healthcare imports, incentives for compressed natural gas (CNG) and electric vehicles, and import duty exemptions granted under various government policies.

The Customs chief further disclosed that imports valued at N34.538 trillion benefited from revenue concessions during the year, with petroleum products accounting for the largest share, followed by military imports and other approved exemptions.

For 2026, the service is targeting N11.074 trillion in revenue, comprising federation revenue, non-federation collections, import VAT and free-on-board (FOB) earnings.

To achieve the target, Adeniyi said the agency would fully deploy its Unified Customs Information System (B’Odogwu), strengthen post-clearance audits, expand the Authorised Economic Operator programme, intensify anti-smuggling operations using geospatial technology, and deepen collaboration with stakeholders.

He added that the proposed expenditure budget of N1.235 trillion would cover personnel costs, overheads and capital projects aimed at modernising customs operations and improving revenue collection.