Nigeria Introduces Green Tax Surcharge on High-Emission Vehicles

Key facts

• Nigeria's Finance Minister Wale Edun signed a circular on April 1, 2026, to introduce a green tax surcharge on vehicles, effective from July 1.
• The tax is imposed on vehicles with engine capacities of 2,000 cc and above, with a 2 per cent tax for 2,000 cc to 3,999 cc and 4 per cent for 4,000 cc and above.
• Exemptions from the green tax are provided for vehicles with engine sizes below 2,000 cc, mass transit buses, electric vehicles (EVs), and locally manufactured vehicles.
• Import tariffs on fully built passenger vehicles have been reduced from 70 per cent to 40 per cent within the Economic Community of West African States (ECOWAS) common external tariff (CET) structure.
• A 90-day grace period has been granted to manufacturers, importers, and service providers for the transition to the new fiscal measures.
• Nigeria has imposed a 5 per cent fuel surcharge on petrol and diesel since January 1.
• According to the National Bureau of Statistics, Nigeria's passenger car imports increased to Naira 1.58 trillion.
• Under its Third Nationally Determined Contribution (NDC 3.0), Nigeria commits to reducing greenhouse gas emissions by 29 per cent by 2030 and 32 per cent by 2035 compared to 2018 levels.
• Nigeria has committed to achieving net zero emissions by 2060.
• The transport sector is identified as having a mitigation potential of 44.3 Mt CO2e through the adoption of clean vehicles.
• Other national initiatives include a Compressed Natural Gas (CNG) programme, removal of fuel subsidies, and a ban on the import of polluting two-stroke engines.