FG Reduces Import Duties on Rice, Vehicles, Steel as New 2026 Fiscal Policy Takes Effect

The Federal Government has approved a new 2026 Fiscal Policy Measures (FPM), introducing major adjustments to import tariffs across key sectors, including food items, vehicles, and industrial materials.

A circular dated April 1, 2026, signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, confirmed that the revised policy replaces the 2023 fiscal framework and introduces a broad review of import duty rates aimed at stimulating economic growth.

Under the new structure, the Import Adjustment Tax (IAT) on commodities such as crude palm oil has been revised downward to 28.75 percent, compared to previous higher rates. The government also published a national tariff list covering 127 items with reduced import duties targeting key productive sectors.

One of the major changes is the reduction of tariffs on fully built passenger vehicles, four-wheel drives, and station wagons, which will now attract a total effective duty of 40 percent, down from 70 percent under the 2015 regime.

To ease the transition, importers who had already opened Form M before April 1 will benefit from a 90-day grace period to clear goods at the old rates. However, a new excise duty structure and green tax surcharge are expected to begin on July 1, 2026.

Key tariff adjustments include:

Rice (bulk/above 5kg): 47.5% (down from 70%)
Broken rice: 30% (down from 70%)
Crude palm oil: 28.75% (down from 35%)
Raw cane sugar: 55%–57.5% (down from 70%)
Refined salt: 55% (down from 70%)
Ceramic tiles: 35%–46.25% (reduced from 40%–55%)
Steel products: generally reduced to 35% or lower in several categories
Diaries and envelopes: reduced to 30%–40%

Major exemptions and zero-duty items include:

Railway locomotives (SKD/CKD): 0%
Cargo ships above 500 tonnes: 0%
Medical breathing equipment and gas masks: 0%
Agricultural and manufacturing machinery: 0%

Green tax exemptions:

Items excluded from the proposed green tax surcharge include vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles.