ABUJA: The Nigeria Customs Service (NCS) has announced a significant reduction in import duties on both new and used vehicles as part of the Federal Government’s 2026 fiscal policy, a move aimed at easing trade and stimulating economic activity while setting an ambitious ₦11.074 trillion revenue target for the year.
The Comptroller-General of Customs, Adewale Adeniyi, disclosed the development on Monday while defending the agency’s 2026 budget proposal before the House of Representatives Committee on Customs and Excise.
According to Adeniyi, the import duty on used vehicles has been reduced from 15 per cent to five per cent, while the duty on brand-new vehicles has been lowered from 20 per cent to 10 per cent.
He explained that the revised tariff structure forms part of the Federal Government’s broader fiscal reforms designed to improve trade competitiveness and encourage economic growth.
However, Adeniyi acknowledged that while the policy is expected to stimulate business activities, it could temporarily reduce Customs revenue generated from vehicle imports.
We believe these fiscal measures will strengthen revenue collection in the long run, although the reduction in vehicle tariffs may have some short-term impact on revenue, he told lawmakers.
During the budget defence, members of the House Committee questioned whether the lower tariffs would be enough to discourage importers from routing their cargo through neighbouring countries, particularly the Port of Cotonou in Benin Republic.
Committee member Alex Mascot argued that high import charges had encouraged many Nigerian importers to clear their goods outside the country and urged Customs to monitor whether the revised tariffs would reverse the trend.
Responding, Adeniyi revealed that implementation of the new tariff regime began in May, adding that the Service is monitoring its impact on trade volumes and revenue generation.
Committee Chairman Leke Abejide welcomed the reduction, describing it as a positive policy that responds to long-standing calls by Nigerians for lower vehicle import duties.
Despite several fiscal incentives introduced by the Federal Government, the Nigeria Customs Service recorded strong revenue performance in 2025.
Adeniyi disclosed that the agency generated ₦7.258 trillion between January and December 2025, exceeding its annual target by ₦1.153 trillion, representing an 18.89 per cent increase.
He attributed the achievement to improved revenue collection strategies despite several policy measures that reduced potential earnings.
Among the factors affecting revenue were the suspension of excise duty on telecommunications services, tax incentives for healthcare imports, the continued suspension of the proposed Green Tax and concessions granted to encourage local production.
The Customs boss also noted that incentives for Compressed Natural Gas (CNG) vehicles and electric vehicles contributed to lower import-related revenue.
According to him, imports worth ₦34.538 trillion benefited from various duty waivers and concessions during 2025.
He said petroleum products accounted for 56.4 per cent of the concessions, military imports represented 40.52 per cent, while Import Duty Exemption Certificates (IDEC) and other approved imports made up the remaining 3.08 per cent.
Adeniyi added that disruptions in global trade caused by the Russia-Ukraine conflict also affected import volumes, particularly wheat shipments into Nigeria.
Looking ahead, the Nigeria Customs Service has projected ₦11.074 trillion in revenue for the 2026 fiscal year.
The target includes:
- ₦5.542 trillion for the Federation Account.
- ₦2.773 trillion from import Value Added Tax (VAT).
- ₦1.491 trillion in non-Federation revenue.
- ₦1.266 trillion from Free-on-Board (FOB) collections.
To achieve the target, Adeniyi said the Service will accelerate the nationwide deployment of the Unified Customs Information System (UCIS), also known as B’Odogwu, to automate customs operations and improve efficiency.
Other initiatives include expanding post-clearance audits, strengthening real-time compliance monitoring, enhancing border surveillance with geospatial technology, increasing joint border patrols to combat smuggling and broadening stakeholder engagement.
He also expressed optimism that the planned reintroduction of the Green Tax and implementation of the new excise tariff regime would support revenue growth despite ongoing geopolitical tensions affecting global trade.
The Customs Service is proposing a ₦1.235 trillion expenditure for the 2026 fiscal year.
According to Adeniyi, the budget will be funded through allocations from the four per cent Free-on-Board revenue, the agency’s share of VAT collections and funds designated for ongoing capital projects.
The proposed spending includes ₦421.7 billion for personnel costs, ₦307.77 billion for overhead expenses and ₦565.93 billion for capital projects aimed at modernising Customs operations and improving service delivery.
The revised vehicle tariff policy is expected to provide relief for importers and prospective vehicle owners while supporting the Federal Government’s broader objective of promoting trade, improving compliance and strengthening Nigeria’s economic competitiveness.
