Nigeria Customs Confirms FG Slashes Import Duties on Tokunbo and New Vehicles

The Federal Government has officially reduced import duties on both used (Tokunbo) and brand-new vehicles, a move expected to lower the cost of vehicle imports and provide relief for millions of Nigerians struggling with soaring car prices. The Comptroller-General of the Nigeria Customs Service (NCS), Adewale Adeniyi, confirmed the development while defending the agency's 2026 budget proposal before the House of Representatives Committee on Customs and Excise.

Tariff Reductions: From 15% to 5% on Used, 20% to 10% on New

According to Adeniyi, import tariffs on used vehicles have been slashed from 15% to 5%, while duties on brand-new vehicles have been reduced from 20% to 10% under the Federal Government's 2026 fiscal policy. Adeniyi disclosed that implementation of the revised tariff regime began in May, marking a major policy shift aimed at easing the cost of vehicle imports. He explained that although the lower tariffs are expected to encourage legitimate imports and improve trade, they could also reduce Customs revenue from vehicle imports.

"The new excise tariff is contained in the 2026 fiscal policy. We believe these measures will improve revenue collection. However, tariffs on vehicles have been reduced significantly. Used vehicles now attract five per cent duty instead of 15 per cent, while new vehicles have been reduced from 20 per cent to 10 per cent. This may negatively affect revenue," Adeniyi said.

Lawmakers Praise Policy but Question Cargo Diversion Risks

The announcement was welcomed by members of the House Committee, who described the policy as a long-awaited relief for Nigerians. Committee Chairman Leke Abejide praised the Federal Government for responding to public concerns over the high cost of imported vehicles. He urged Nigerians to acknowledge the policy as a positive step, noting that many citizens and businesses had repeatedly called for lower import charges.

However, lawmakers also questioned whether the reduced tariffs would be sufficient to stop importers from diverting cargo to neighbouring ports, particularly Cotonou in the Benin Republic. Abia lawmaker Alex Mascot argued that many importers still avoid Nigerian ports because of the overall high cost of clearing goods, despite the tariff reduction.

Customs Hits N7.258 Trillion in 2025, Targets N11.074 Trillion for 2026

Despite several fiscal concessions introduced by the government, the Nigeria Customs Service exceeded its 2025 revenue target. Adeniyi disclosed that the agency generated N7.258 trillion between January and December 2025, surpassing its approved target by N1.153 trillion, representing an 18.89% increase. He attributed the performance to improved enforcement and compliance, despite policies that reduced Customs collections.

These included the suspension of excise duty on telecommunications services, tax incentives for healthcare imports, exemptions on compressed natural gas (CNG) and electric vehicles, as well as duty waivers granted under various government programmes. The Customs boss also revealed that imports worth N34.538 trillion qualified for revenue concessions in 2025, with petroleum products accounting for the largest share, followed by military imports and other approved exemptions.

Looking ahead, Adeniyi said the Nigeria Customs Service has been assigned a N11.074 trillion revenue target for the 2026 fiscal year. To achieve the ambitious goal, the agency plans to fully deploy its Unified Customs Information System, known as B'Odogwu, strengthen post-clearance audits, expand the Authorised Economic Operator programme, deploy geospatial technology to tackle smuggling, and deepen collaboration with stakeholders. He added that the planned reintroduction of the Green Tax and other fiscal measures are expected to support revenue growth despite uncertainties in global trade caused by geopolitical tensions.

For 2026, the Customs Service proposed an expenditure budget of N1.235 trillion, covering personnel costs, overheads, and capital projects aimed at modernising operations and improving nationwide revenue collection.

What This Means for the Naira and Nigerian Consumers

The sharp reduction in vehicle import duties could put downward pressure on car prices in the local market, offering relief to consumers and businesses hit by high inflation and a weak naira. However, if cargo diversion to ports like Cotonou persists, the full benefits of the tariff cut may not reach Nigerian buyers. The success of the policy will depend on how effectively Customs can enforce compliance and reduce the total cost of clearing goods at Nigerian ports.