Newly-introduced Green Tax policy of the federal government has effectively kicked off with the total exemption of import duty on electric (EVs) and compressed natural gas (CNG) powered vehicles.

Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who earlier announced the sweeping tariff slash on a total of 127 items across sectors of the economy, further explained that the decision by the government is intended to ease cost of living for Nigerians.

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Oracle Intelligence recalls that the Federal Government, earlier in the week, rolled out a sweeping review of Nigeria’s import tariff regime, reducing duties on vehicles, food items and industrial equipment in a move aimed at easing the rising cost of living, while simultaneously introducing a new Green Tax to support environmental sustainability.

According to an update issued by the Nigeria Customs Service (NCS), the new measures took effect on July 1, 2026, under the 2026 Fiscal Policy Measures approved by the Minister of Finance and Coordinating Minister of the Economy, Mr. Oyedele.

As part of the reforms, import levies on vehicles have been significantly reduced. The levy on new vehicles has been cut from 20 per cent to 10 per cent, while that of used (tokunbo) vehicles has dropped from 15 to five per cent.

Government also reduced the import duty on passenger vehicles (buses) from 70 percent to 40 percent, a move expected to lower the cost of vehicle imports and make car ownership more affordable for Nigerians.

In a major incentive for cleaner transportation, mass transit buses and electric vehicles (EVs) have been granted full import duty exemptions, a move intended to drive the full adoption of environmentally-friendly transport policy while reducing operating costs for transport companies.

Government further announced substantial reductions in import duties on several essential food commodities.

Import duty on bulk rice has been reduced from 70 per cent to 47.5 per cent, while the tariff on broken rice has been lowered to 30 percent. Duties on crude palm oil have also been cut from 35 per cent to 28.75 per cent.

Similarly, import duties on raw cane sugar have been adjusted to between 55 per cent and 57.5 per cent, a move expected to reduce production costs for food manufacturers and ease prices for consumers.

In the agricultural and manufacturing sectors, government has also entirely removed import duties on machinery to encourage local production and improve productivity.

In addition, Waste PET has now been placed on Nigeria’s export prohibition list as part of efforts to strengthen the domestic recycling industry and support environmental protection.

The latest fiscal measures represent one of the most comprehensive tariff reforms introduced in recent years, affecting 127 tariff lines across multiple sectors of the economy that effectively imposes lower duties on critical imports and incentives for cleaner transportation.

According to the government, the reforms are intended to help reduce inflationary pressures, lower business costs and provide much-needed relief for households grappling with the country’s economic challenges.