Follow Us on Google
By Steve Agbota
The car dealers have said that the 40% reduction in tariffs on imported used commercial vehicles will not significantly ease the burden on consumers and vehicle business in the country.
The importers described the Federal Government’s reduction of tariffs on vehicles from 70 per cent to 40 per cent as having only a marginal impact on vehicle prices.
Those who spoke with Daily Sun said that the 40 per cent reduction is only tariff not the import duty, which form the major component of car prices in the country.
This comes as the government rolled out the 2026 Fiscal Policy Measures (FPM), a broad package of reforms aimed at stimulating economic growth through adjustments in import tariffs across key sectors.
Under the new policy, the Import Adjustment Tax (IAT) on products such as crude palm oil has been reduced to an effective rate of 28.75 per cent. In the automotive sector, tariffs on fully built passenger vehicles, including four-wheel drives and station wagons, were also cut to 40 per cent from 70 per cent, reversing the higher rates introduced under the 2015 FPM.
Speaking with Daily Sun, President of the Association of Motor Dealers of Nigeria (AMDON), Prince Ajibola Adedoyin, said that the policy is only meant for commercial vehicles, which is a welcome development, saying its effect on vehicle prices will be minimal.
“In as much as it will reduce prices, the impact will not be significant. The reduction is on tariff and not on import duty, which forms a larger component of the total cost,” he said.
According to him, the scale of the tariff reduction is too small relative to overall import costs to drive meaningful price changes.
“For instance, if a vehicle costs about N5 million, and the tariff component is around N400,000, while duty is higher, the reduction in tariff may only result in a difference of about N150,000. That is not substantial enough to significantly affect the final price for buyers,” he added.
He noted that a reduction in import duty, rather than tariffs alone, would have a more noticeable impact on vehicle affordability.
“Yes, if the government reduces import duty, the effect will be more significant because of its larger share in the total cost structure,” he said.
While calling for further policy adjustments, he acknowledged the government’s ongoing efforts to promote locally assembled vehicles.
However, he cautioned, that reducing import duties could inadvertently encourage increased vehicle importation at the expense of domestic production.
“We are trying to promote made-in-Nigeria vehicles. If import duties are reduced, it may encourage more imports instead of supporting local manufacturing,” he noted.
He added that although Nigeria’s local automotive capacity remains limited, efforts by the National Automotive Design and Development Council (NADDC) are beginning to yield results, with some locally assembled vehicles becoming more affordable.
“Recently, we have seen improvements, with prices of some locally assembled vehicles coming down. That is encouraging,” he said.
He also emphasised the need to strengthen after-sales support for locally assembled vehicles, including improved warranty terms and maintenance services, to boost consumer confidence.
“For local vehicles to gain wider acceptance, there must be strong after-sales service and reliable warranties that allow users to operate the vehicles for a reasonable period before encountering maintenance issues,” he added.
A car importer and dealer at Berger International Automobile Yard, Don Ikenna, said that 40 per cent slash in tariff for imported vehicles could be a welcome development but it will has less impact on the automobile industry especially on the imported vehicles.
“If this 40 per cent reduction is true, what means is that it only going to reflect on the tariff not the duty. The import duty is the major component that drives the prices of imported vehicles. That is why you see cars are very expensive now. What we expect the government to do is slash the import duty paid on imported cars, which we have been telling the authority for the past few years now but they refused to listen to us.
“A lot of importers have left this car business and divert into real estate business and other things for survival and while most have lost their lives due to unserviceable loan. Car importation business is not thriving again due to high import duty and taxes here and there.
“Before now, a lot of graduate used to buy cars and use it for Uber business. But today, how many of these graduate roaming the street can afford a Toyota Corolla of about N10 million? Even the locally manufactured cars, how many Nigerians can afford them? This is one of the reasons we are having all sort of crimes in the country today,” he said.
He said the 40 per cent reduction in tariff is not going to have enough significant effect on the automobile industry, saying that the Federal Government needs to listen to importers and agents to reduce the import duty on the imported vehicles.
However, clearing agents who spoke to Daily Sun on the development said that they were not aware of the 40 per cent tariff reduction while some who said they have studied the 2026 Fiscal Policy Measures did not see the 40 per cent reduction in the document.
The formal National Secretary of Association of Nigerian Licensed Customs Agents (ANLCA), Abdulazeez Babatunde Mukaila` , said serial number 181 to 186 of the supplementary release covers automobiles.
“I didn’t see any reductions, rather the used vehicles has been upgraded from 20% duty plus 15% adjustment tax to 20% plus 20% for 2026 fiscal year. Further clarification needed.
”I would rather say supplementary protections Measures (SPM) are meant to protect local automobile industries, any reduction duty rate will jeopardize the aim and intentions of the Government,” he said.
