…Introduces new excise taxes, green surcharge from July
…Grants 90-day grace period, boosts industry with zero-duty machinery
The Federal Government has approved a comprehensive fiscal policy package for 2026, slashing import duties on key commodities, including vehicles, rice, palm oil and sugar, while introducing targeted taxes and safeguards to boost local production and economic growth.
The policy, outlined in a circular issued by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, replaces the 2023 fiscal guidelines and took effect from April 1, 2026.
The document stated that the measures align with the ECOWAS Common External Tariff (CET) framework and are aimed at promoting growth in critical sectors of the economy.
At the core of the reforms is a revised national tariff regime covering 127 items, many of which now attract lower duties. Notably, tariffs on fully built passenger vehicles, including four-wheel drives and station wagons, have been reduced to 40 per cent from the previous 70 per cent.
Food imports also saw significant adjustments. Bulk rice now attracts a duty of 47.5 per cent, down from 70 per cent, while broken rice has been reduced to 30 per cent. Crude palm oil imports are now pegged at an effective rate of 28.75 per cent, while raw sugar tariffs range between 55 and 57.5 per cent, also lower than previous levels. Refined salt for human consumption has been adjusted to 55 per cent.
The government also reduced duties on several industrial and household items. Envelopes now attract 40 per cent duty, down from 50 per cent, while notebooks are set at 30 per cent. Ceramic tiles have also been adjusted, with unglazed tiles at 35 per cent and glazed tiles at 46.25 per cent.
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In the steel sector, key materials such as zinc-coated sheets, steel coils and rods now attract about 35 per cent duty, reduced from earlier rates of up to 45 per cent. Cold-rolled steel with low carbon content is set at a lower rate of 15 per cent.
Other reductions affect electrical and construction-related equipment. Automatic circuit breakers now attract 10 per cent duty, down from 20 per cent, while modular surgical operating theatres have been reduced sharply to 5 per cent from 20 per cent. Air compressors and similar equipment are now set at 5 per cent.
In a move aimed at boosting industrialisation, the government approved zero import duty on a number of critical assets. These include agricultural and manufacturing machinery, railway and tramway locomotives, cargo ships above 500 tonnes, as well as breathing equipment such as gas masks.
The policy also introduces Supplementary Protection Measures, including an Import Adjustment Tax on 192 tariff lines and an import prohibition list covering 17 items from countries outside the ECOWAS region. Items on the prohibition list include certain agricultural products and hazardous materials.
Edun said the Import Adjustment Tax would not be permanent, noting that “with effect from January 2027, all Import Adjustment Taxes, except for products on the African Continental Free Trade Area 3 per cent list, shall be gradually reduced on an annual basis until full elimination to zero per cent by 2036, in line with Nigeria’s commitments.”
As part of the changes, new excise duties will apply to non-alcoholic and alcoholic beverages, cigarettes and tobacco products. A green tax surcharge will also be introduced, both taking effect from July 1, 2026.
However, the government provided exemptions under the green tax policy. Vehicles with engine capacity below 2000cc, mass transit buses, electric vehicles and locally manufactured auto components will not be subject to the surcharge, a move seen as encouraging cleaner transportation and local production.
To ease the transition, the government granted a 90-day grace period for importers who had initiated transactions before April 1, 2026. Such importers will be allowed to clear their goods under the old duty rates, provided they have existing Form ‘M’ and irrevocable trade agreements.
“A grace period of ninety days commencing from the date of this circular is hereby granted to all importers, manufacturers, and service providers,” the minister said, adding that the new excise duty rates would begin from July, while subsequent rates for 2027 and 2028 would take effect from January of each year.
The measures also include environmental controls, with waste polyethylene terephthalate added to the export prohibition list.
Edun said the full details of the fiscal policy measures would be published in the official government gazette and urged stakeholders to comply with the new framework.
“These Fiscal Policy Measures, which supersede the 2023 Fiscal Policy Measures, shall be published in the Official Federal Government Gazette,” he said.
The new policy signals a shift in Nigeria’s trade and fiscal strategy, combining lower tariffs on key imports with targeted protections and incentives aimed at strengthening domestic industries while meeting regional and continental trade commitments.
