The Federal Government’s revised vehicle import levy regime has officially come into effect, raising expectations of possible reductions in automobile prices.
However, auto dealers seek clarification on the newly introduced Green Tax before determining the overall impact of the policy.
Implemented under the 2026 Fiscal Policy Measures, the new arrangement reduces the import levy on brand-new vehicles from 20 per cent to 10 per cent, while the levy on used vehicles has been slashed from 15 per cent to five per cent.
The policy is intended to lower import costs, stimulate economic activities and provide relief for businesses and consumers in the automotive sector.
In addition to the levy cuts, the government introduced a Green Tax surcharge on selected categories of imported vehicles as part of its environmental sustainability agenda.
However, stakeholders in the automobile industry say uncertainty surrounding the exact structure and cost implications of the Green Tax makes it difficult to determine whether consumers will eventually benefit from lower vehicle prices.
Speaking in an interview with Vanguard, President of the National Association of Motor Dealers and Chief Executive Officer of Mitchel Automobile Limited, Prince Ajibola, described the levy reduction as a welcome development but stressed that the full impact would depend on the magnitude of the Green Tax.
“We don’t know what the surcharge is going to be. If they reduce the levy on vehicles and then introduce another surcharge, we need to know how much it is before we can say there will be any considerable change,”
