By Pius Mordi
Imported vehicles may cost less soon as the Federal Government has officially released the 2026 Fiscal Policy Measures (FPM) and new tax laws, effective from April 1, 2026.
The new regime is aimed at stimulating economic growth through tariff reductions on vehicles and raw materials, while implementing a new excise duty regime from July 1, 2026.
The reform includes tax exemptions for small businesses and lower-income earners.
According to an April 1, 2026, circular signed by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, the new measures supersede the 2023 FPM.
Import duties on fully built units (FBU) of passenger motor vehicles, four-wheel drive vehicles, and station wagons, was reduced to 40% from 70%.
A national list of 127 tariff lines has been introduced, offering lower import duty rates to encourage local production.
New excise duty rates on goods and a green tax surcharge will take effect on July 1, 2026, with further updates scheduled for January of 2027 and 2028.
Under the new regime, the import adjustment tax (IAT) on items like crude palm oil has been set at a total effective rate of 28.75 percent, down from previous high-tariff regimes.
A 90-day grace period is granted to importers with existing Form ‘M’ and irrevocable trade agreements made before April 1, 2026, to clear their goods under the previous tax regime.
Waste Polyethylene Terephthalate (rPET) has been added to the export prohibition list to prioritize local recycling.
For small businesses , there is cause optimism as companies with an annual turnover of less than ₦50 million are now 100% exempt from Company Income Tax (CIT).
Correspondingly, the tax-free threshold has been increased, exempting individuals earning ₦800,000 or less annually from personal income tax.
While Value Added Tax remains generally at 7.5%, the new regime maintains a 0% rate on essential goods, such as basic food items, educational materials, and healthcare services.
Similarly, multiple taxes and levies have been consolidated into about five main categories, including income tax, stamp duty, a development levy, and VAT, to simplify compliance while taxpayers can now claim a 20% deduction on annual rent, capped at ₦500,000.
The reforms replace the 2023 Fiscal Policy Measures and represent a significant overhaul of Nigeria’s fiscal structure aimed at easing the tax burden on low-income earners and small businesses, while promoting industrial growth.
