Vehicle Import Levy Regime takes effect as dealers await Green Tax details

The vehicle import levy regime has officially taken effect in Nigeria, cutting import levies on new and used vehicles. However, auto dealers say the vehicle import levy regime may not lower car prices until the Federal Government explains the newly introduced Green Tax.

Under the 2026 Fiscal Policy Measures, the government reduced the import levy on brand-new vehicles from 20% to 10%. It also cut the levy on used vehicles from 15% to 5% to reduce import costs and support businesses.

However, dealers argue that the Green Tax could offset the savings. President of the National Association of Motor Dealers, Prince Ajibola, said the industry cannot predict price changes without knowing the size of the surcharge.

He explained that if the Green Tax remains lower than the levy reductions, consumers could benefit from cheaper vehicles. Conversely, if it matches or exceeds the cuts, prices may remain unchanged.

Ajibola also identified import duties and foreign exchange costs as major drivers of high vehicle prices. He added that commercial vehicles could become more affordable if the Green Tax stays modest.

Meanwhile, industry stakeholders said they will closely monitor the implementation of the vehicle import levy regime as the Nigeria Customs Service applies the revised tariff structure. They believe clear guidance on the Green Tax will determine whether Nigerians ultimately pay less for imported vehicles.