FG Introduces 2026 Fiscal Policy, Slashes Tariffs on Vehicles, Food Items, Steel, Others

FG Introduces 2026 Fiscal Policy, Slashes Tariffs on Vehicles, Food Items, Steel, Others

The Federal Government has released its 2026 Fiscal Policy Measures (FPM), introducing sweeping changes to import duties across multiple sectors, including vehicles, food commodities, industrial materials, and machinery, in a move aimed at boosting economic activity and easing cost pressures.

According to an official circular dated April 1, 2026, and signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the new framework replaces the 2023 fiscal policy regime and establishes a revised national tariff schedule covering 127 tariff lines.

The government said the policy is designed to stimulate trade, support industrial growth, and improve affordability of essential goods, while also encouraging investment in local production capacity.

Major Tariff Cuts Across Key Sectors

Under the new structure, import duties on fully built passenger vehicles, including SUVs and station wagons, have been reduced to a total effective rate of 40%, down from about 70% under previous regimes.

Crude palm oil now attracts an effective tariff of 28.75%, while several food and consumer items also saw reductions, including rice, sugar, and salt.

Key revised rates include:

• Rice (above 5kg packaging): 47.5%
• Broken rice: 30%
• Raw cane sugar: 55%–57.5%
• Refined salt: 55%
• Margarine: 40%

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The policy also reduces tariffs on construction and household goods such as envelopes, notebooks, ceramic tiles, and steel products, aimed at lowering input costs for manufacturers and developers.

Industrial and Infrastructure Materials

Significant reductions were also recorded in the industrial sector. Steel products such as zinc-coated sheets, steel coils, and rods now attract 35% duties, down from 45%, while certain machinery and equipment categories have been reduced to 0%–10% tariffs.

These include:

• Railway locomotives (SKD/CKD): 0%
• Cargo ships above 500 tonnes: 0%
• Agricultural machinery: 0%
• Medical and industrial equipment: 5%–10%

Officials say these changes are aimed at improving infrastructure development, manufacturing competitiveness, and healthcare access.

Transition Measures and New Tax Framework

To ease implementation, the government approved a 90-day grace period for importers who opened Form M before April 1, allowing them to clear goods at previous tariff rates.

However, authorities also announced that a new excise duty framework and green tax surcharge will take effect from July 1, 2026, as part of broader environmental and revenue reforms.

The green tax policy will target emissions-linked consumption patterns, although exemptions include:

• Electric vehicles
• Vehicles below 2000cc
• Mass transit buses
• Locally manufactured vehicles under specific tariff headings

Policy Objectives and Economic Impact

The Finance Ministry said the reforms are intended to balance revenue generation with economic relief, while aligning Nigeria’s trade policy with regional and global standards.

Analysts say the tariff cuts could help reduce import costs and ease inflationary pressure on consumers, but may also increase competitive pressure on local manufacturers who depend on protective tariffs.

The fiscal framework is part of broader reforms under the Tinubu administration to reposition Nigeria’s economy through tax restructuring, trade liberalisation, and industrial policy adjustments.

FG Introduces 2026 Fiscal Policy, Slashes Tariffs on Vehicles, Food Items, Steel, Others