FG slashes tariffs on cars, food items, medicines in new 2026 fiscal policy

The Federal Government has approved the implementation of the 2026 Fiscal Policy Measures (FPM), introducing wide-ranging adjustments to import tariffs aimed at boosting growth across key sectors of the economy.

The approval was contained in a document dated April 1, 2026, and signed by the Minister of Finance, Wale Edun. The new policy replaces the 2023 FPM framework.

A central feature of the reforms is the revision of import duties on 127 tariff lines, covering essential commodities such as rice, sugar, vehicles, and industrial inputs. The government said the changes are intended to “promote and stimulate growth in critical sectors of the economy.”

Under the new regime, the Import Adjustment Tax (IAT) on crude palm oil has been reduced to a total effective rate of 28.75 percent, compared to higher rates under previous structures.

In the automotive sector, tariffs on fully built passenger vehicles — including four-wheel drives and station wagons — have been cut to 40 percent from 70 percent as previously set in the 2015 FPM.

To ease the transition, a 90-day grace period has been granted to importers who opened Form ‘M’ before April 1, allowing them to clear goods at the old rates.

However, the policy also introduces a new excise duty regime and a green tax surcharge, both scheduled to take effect from July 1, 2026.

Key tariff adjustments

The revised tariff structure includes the following:

Antimalarial medicaments: 20%

Rice (bulk or above 5kg): 47.5% (from 70%)

Broken rice: 30% (from 70%)

Wheat or meslin flour: 70%

Crude palm oil: 28.75% (from 35%)

Raw cane sugar: 55% (from 70%)

Cane/beet sugar (powder or granule): 57.5% (from 70%)

Margarine (excluding liquid): 40%

Refined salt: 55% (from 70%)

Envelopes: 40% (from 50%)

Diaries/notebooks: 30% (from 40%)

Unglazed ceramic tiles: 35% (from 40%)

Glazed ceramic tiles: 46.25% (from 55%)

Ceramic cubes (less than 7cm): 35% (from 40%)

Steel and industrial inputs

Zinc-coated steel sheets: 35% (from 45%)

Aluminium-coated steel coils: 35% (from 45%)

Electroplated steel: 35% (from 45%)

Cold-rolled steel (less than 0.25% carbon): 15%

Hot-rolled deformed steel bars: 35% (from 45%)

Steel rods (5.5mm–14mm): 35% (from 45%)

Other adjustments

Electrical apparatus (e.g., fuses): 10% (from 20%)

Railway/tramway locomotives (SKD/CKD): 0% (from 5%)

Cargo ships (above 500 tonnes): 0% (from 5%)

Breathing appliances and gas masks: 0% (from 5%)

Agricultural and manufacturing machinery: 0% (from 5%)

Modular surgical operating theatres: 5% (from 20%)

Air or vacuum pumps/compressors: 5% (from 10%)

Automatic circuit breakers: 10% (from 20%)

Lamp holders: 10% (from 20%)

Green tax exemptions

The policy also outlines exemptions from the planned green tax surcharge, including:

Vehicles below 2000cc

Mass transit buses (heading 87.02)

Electric vehicles

Locally manufactured vehicles under specified headings (87.06–87.13)

The government said the reforms are designed to strike a balance between revenue generation and economic stimulation, while also supporting local industries.