|By Babatunji Wusu
The Federal Government has rolled out sweeping fiscal reforms, slashing import tariffs across key sectors in a bold move aimed at stimulating economic growth and easing the cost of critical goods.
In a directive dated April 1, 2026, and signed by the Minister of Finance, Wale Edun, the government approved the implementation of the 2026 Fiscal Policy Measures (FPM), replacing the 2023 framework.
At the heart of the reform is a major overhaul of import duties across 127 tariff lines, targeting essential commodities such as rice, sugar, vehicles, and industrial inputs. The government says the policy is designed to drive productivity, support local industries, and unlock growth in critical sectors.
Under the new regime, import duties on staple goods have been sharply reduced. Tariffs on rice imports dropped to 47.5 percent from 70 percent, while crude palm oil now attracts 28.75 percent, down from 35 percent. Sugar, refined salt, and several household items also recorded significant cuts.
In a major boost for the automotive sector, tariffs on fully built passenger vehicles—including four-wheel drives and station wagons—have been slashed from 70 percent to 40 percent, signaling a shift toward making vehicles more accessible.
Industrial and manufacturing inputs were not left out. Duties on steel products, aluminum-coated materials, and industrial machinery have been reduced, while some equipment—including agricultural machinery, cargo ships, and railway locomotives—will now attract zero duty, a move expected to energize infrastructure and production capacity.
To cushion the transition, the government granted a 90-day grace period for importers who opened Form ‘M’ before April 1, allowing them to clear goods under the old tariff rates.
However, the reforms also introduce a new excise duty regime and a green tax surcharge, set to take effect from July 1, 2026. The green tax, aimed at promoting environmental sustainability, will exempt certain categories, including electric vehicles, mass transit buses, and vehicles below 2000cc, as well as locally manufactured automobiles.
Other notable reductions include:
- Antimalarial drugs at 20%
- Broken rice at 30% (down from 70%)
- Ceramic tiles reduced across categories
- Electrical components such as fuses and circuit breakers cut by half
The government says the reforms strike a balance between revenue generation and economic stimulation, while lowering import costs and strengthening domestic production.
With these aggressive tariff cuts and policy shifts, authorities are positioning the economy for increased investment, improved industrial output, and broader consumer relief.
