The Federal Government's cut to vehicle import levies took effect this week, sparking optimism about cheaper cars but leaving auto dealers demanding answers on a newly announced Green Tax. The 2026 Fiscal Policy Measures slashed the import levy on new vehicles to 10 per cent from 20 per cent, while the duty on used vehicles dropped to five per cent from 15 per cent.
Officials say the reduction aims to lower import costs, boost economic activity and ease the burden on businesses and consumers. Yet the government paired the levy cuts with a fresh Green Tax Surcharge on certain imported vehicles to support environmental goals.
The problem is murky. Dealers say they can't properly evaluate whether prices will actually fall without knowing the surcharge's size.
Prince Ajibola, president of the National Association of Motor Dealers and boss of Mitchel Automobile Limited, told reporters the levy reduction looked promising but hinged entirely on the Green Tax figure.
"We don't know what the surcharge will be," he said in an interview. "If they cut the levy and then add another tax, we need to know the amount before we can say there's real change."
Ajibola acknowledged that dropping the used vehicle levy from 15 per cent to five per cent marks a solid win for the sector. However, he warned that gains could vanish if the Green Tax eats into savings.
"If the surcharge is much lower than the reduction, it works in our favour," he explained. "But if it matches or exceeds the cut, nothing fundamentally shifts." He stressed that import duties rank among the heaviest cost drivers for vehicles in Nigeria, alongside currency pressures.
The policy could meaningfully slash prices—especially for commercial vehicles where the tariff relief is steeper—provided the Green Tax stays modest, Ajibola suggested. "This move is genuinely good," he told the outlet.
"But to know its real effect on pricing, we must see the Green Tax number. If it's small, the levy reduction keeps its bite and buyers will notice."
Industry watchers plan to track how the Nigeria Customs Service executes the new tariff framework as it rolls out. They expect clarity on the Green Tax will ultimately decide whether the levy cut delivers real relief at the showroom.
