FG Cuts Tariffs On Cars, Palm Oil, Sugar In New 2026 Fiscal Policy Measures

The federal government has approved the implementation of its 2026 Fiscal Policy Measures (FPM), introducing sweeping tariff adjustments aimed at stimulating growth across key sectors of the economy.

A circular from the Federal Ministry of Finance indicated that the 2026 measures will supersede the 2023 FPM and introduce a revised tariff regime, including a national list of 127 tariff lines with reduced import duty rates designed to promote economic activity in critical sectors.

Under the new structure, import duties have been adjusted downward on several key commodities. The import adjustment tax on crude palm oil, for instance, has been reduced to an effective rate of 28.75 percent from previous higher levels.

Similarly, tariffs on fully built passenger vehicles, including four-wheel drives and station wagons, have been cut to 40 percent from the 70 percent rate stipulated in the 2015 fiscal policy.

The government also introduced transitional measures, granting a 90-day grace period for importers who opened Form ‘M’ before April 1, allowing them to clear goods using the old tariff rates.

However, the circular noted that a new excise duty regime, alongside a green tax surcharge, will take effect from July 1, 2026.
A breakdown of the revised tariff schedule shows significant reductions across food, industrial, and manufacturing inputs.

Bulk rice imports now attract a 47.5 percent duty, down from 70 percent, while broken rice has been reduced to 30 percent.
Raw cane sugar duties were also cut, with rates now ranging between 55 percent and 57.5 percent, compared to the previous 70 percent. Refined salt imports saw a similar reduction to 55 percent.

In the manufacturing and construction sectors, tariffs on steel products, including zinc-coated sheets and aluminium-coated coils, were reduced to 35 percent from 45 percent. Duties on ceramic tiles and related materials were also lowered to support local construction activity.

The policy further prioritises industrialisation by slashing tariffs on machinery and critical equipment. Agricultural and manufacturing machinery now attract zero percent duty, down from five percent, while cargo ships above 500 tonnes and railway locomotives under SKD/CKD arrangements have also been exempted from import duties.

Medical and safety equipment benefited from the adjustments, with breathing appliances and gas masks now duty-free, while modular surgical operating theatres saw tariffs reduced to five percent from 20 percent.

According to a report by TheCable, the new policy framework was contained in a circular dated April 1, 2026, and signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

Electrical and industrial components, including circuit breakers, lamp holders, and compressors, also recorded reductions, reflecting the government’s push to lower production costs and enhance competitiveness.

In addition, certain categories of vehicles and transport equipment have been excluded from the newly introduced green tax surcharge. These include vehicles below 2000cc engine capacity, mass transit buses, electric vehicles, and locally manufactured automotive components.

The 2026 FPM is expected to support the federal government’s broader economic reform agenda by easing import costs for critical inputs, encouraging industrial growth, and aligning Nigeria’s trade policy with its development priorities.