The Federal Government has introduced sweeping tariff reductions on key imports, including vehicles, palm oil, rice, and sugar, as part of its newly approved 2026 fiscal policy measures aimed at stimulating economic growth and easing cost pressures.
In a circular dated April 1, 2026, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the new framework replaces the 2023 fiscal policy regime.
At the core of the reforms is a revised national tariff structure covering 127 import lines. The government said the adjustments are designed to support critical sectors, enhance industrial productivity, and improve access to essential goods.
Notably, tariffs on fully built passenger vehicles—including four-wheel drives and station wagons—have been reduced to 40 percent, a significant drop from the 70 percent rate under the 2015 policy. Similarly, the import adjustment tax on crude palm oil has been lowered to an effective rate of 28.75 percent.
Basic food commodities also saw considerable relief. Bulk rice imports now attract a 47.5 percent duty, down from 70 percent, while broken rice is set at 30 percent. Tariffs on raw sugar have been reduced to between 55 and 57.5 percent, while refined salt now stands at 55 percent.
To ease the transition, importers who opened Form M before April 1 have been granted a 90-day grace period to clear goods using the previous tariff rates.
The policy also introduces a new excise duty regime and a green tax surcharge, both scheduled to take effect from July 1, 2026. However, certain categories—including vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured auto components—are exempted from the green tax, signaling government support for cleaner energy and local industry.
In the industrial sector, tariffs on construction materials have also been revised downward. Ceramic tiles now attract duties ranging from 35 to 46.25 percent, while most steel products, including zinc-coated sheets and rods, are set at 35 percent. Cold-rolled steel with low carbon content has been pegged at 15 percent.
Further boosting manufacturing and infrastructure development, the government has eliminated import duties entirely on agricultural and industrial machinery, cargo vessels, railway locomotives, and breathing equipment.
Analysts say the policy signals a strategic shift toward economic expansion through reduced trade barriers, while also encouraging domestic production and environmentally sustainable practices.
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