Nigeria's federal government has cut import duties on vehicles by half, effective immediately. The move aims to soften the blow of a coming "green tax surcharge" targeting fuel-guzzling models.
The Nigeria Customs Service announced the new rates on Monday. Brand-new vehicles now face a 10 percent levy, down from 20 percent previously.
Used vehicles, locally known as Tokunbo, saw steeper cuts. Import duties on these cars dropped to 5 percent from the earlier 15 percent rate.
Finance Ministry officials issued the directive. It works in tandem with plans to introduce the green surcharge starting July 1.
Vehicles with engines between 2,000cc and 3,999cc will pay a 2 percent green levy. Those with 4,000cc engines and above face a 4 percent surcharge.
Mass transit buses and electric vehicles get exemptions. Locally made cars also escape the new green tax entirely.
"Only vehicles above 2,000cc will pay," Abdulahi Maiwada, the NCS spokesperson, told BusinessDay. He clarified which imports would be affected by the measure.
Full-sized SUVs make up the bulk of affected imports. Popular models include the Toyota Land Cruiser, Volvo XC90, and Mercedes-Benz GLE.
Sports cars and performance hatches also fall within the targeted range. The Porsche 911 and Honda Civic Type R are notable examples.
Nigeria previously eased tariffs on imported vehicles in April this year. The government had reduced those rates from 70 percent to 40 percent.
Used car importers currently navigate a complex tariff maze. A 20 percent Customs duty on CIF value comes first.
Then follows a 7 percent surcharge on that duty amount. A 15 percent National Automotive Council levy applies next.
West African imports attract a 0.5 percent ECOWAS levy. Finally, buyers pay 7.5 percent Value Added Tax at the end.
Murtala Muazu, NCS comptroller for tariffs, explained the green surcharge approach. He noted it differs from standard fiscal measures in its mechanics.
According to him, the system requires a distinct assessment process. Implementation will happen through the HS Code declaration platform for simplicity.
Customs officials are rolling out sensitisation campaigns now. All zonal headquarters are receiving briefings on the new procedures ahead of July.
