The Federal Government of Nigeria has approved sweeping fiscal policy reforms for 2026, slashing import duties on key items such as rice, vehicles, palm oil and sugar, while introducing new taxes and protective measures to support local industries.
The policy, contained in a circular signed 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.
At the core of the reform is a revised tariff schedule covering 127 items, with significant reductions aimed at easing import costs and stimulating economic activity.
Key Duty Cuts
Vehicles: Import duty on fully built passenger vehicles, including SUVs and station wagons, has been reduced from 70% to 40%.
Rice: Bulk rice: 47.5% (down from 70%), Broken rice: 30%
Palm Oil: Crude palm oil now attracts 28.75% duty
Sugar: Raw sugar duties now range between 55% and 57.5%
Salt: Refined salt set at 55%
Industrial and Household Items
Envelopes: 40% (down from 50%)
Notebooks: 30%
Ceramic tiles:
Unglazed: 35%
Glazed: 46.25%
Steel and Construction Materials
Zinc-coated sheets, steel coils, rods: 35% (down from up to 45%)
Cold-rolled steel (low carbon): 15%
Machinery and Equipment
Automatic circuit breakers: 10% (down from 20%)
Modular surgical theatres: 5% (down from 20%)
Air compressors: 5%
Zero Import Duty Items
To boost industrialisation, the government approved 0% duty on:
Agricultural and manufacturing machinery
Railway and tramway locomotives
Cargo ships above 500 tonnes
Breathing equipment such as gas masks
New Taxes and Protection Measures
The policy also introduces:
Import Adjustment Tax on 192 tariff lines
Import prohibition list covering 17 items from outside the Economic Community of West African States region
Excise duties on beverages and tobacco products (effective July 1, 2026)
Green tax surcharge on selected goods
However, exemptions under the green tax include:
Vehicles below 2000cc
Mass transit buses
Electric vehicles
Locally manufactured auto components
Phase-Out Plan
Edun noted that the Import Adjustment Tax is temporary and will be gradually reduced from 2027 until it reaches zero by 2036, in line with commitments under the African Continental Free Trade Area.
Grace Period for Importers
A 90-day grace period has been approved for importers who initiated transactions before April 1, 2026, allowing them to clear goods under the old rates if backed by valid documentation.
Policy Objective
According to the government, the reforms align Nigeria with the ECOWAS Common External Tariff and are designed to; Reduce import costs on essential goods, Encourage industrial growth, Protect local industries and Strengthen regional and continental trade integration.
THENATION