FG unveils 2026 fiscal policy, slashes import tariffs on vehicles, rice, industrial inputs

The Federal Government has approved the implementation of the 2026 Fiscal Policy Measures (FPM), introducing wide-ranging adjustments to import tariffs in a bid to stimulate growth across critical sectors of the economy.

The approval was conveyed in a document 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 Measures.

According to the government, the revised policy reviews import duties across 127 tariff lines, covering key commodities such as rice, sugar, vehicles, steel products and industrial machinery. The reforms are designed to promote economic expansion, support local production and ease the cost of strategic imports.

One of the most significant changes is in the automotive sector. Tariffs on fully built passenger vehicles, including four-wheel drives and station wagons, have been reduced to 40 percent from the previous 70 percent under the 2015 FPM regime.

The move is expected to lower the cost of vehicle imports while maintaining incentives for local assembly.

In addition, railway and tramway locomotives in semi-knocked-down (SKD) and completely knocked-down (CKD) forms, as well as cargo ships above 500 tonnes, now attract zero percent duty, down from five percent.

The policy also reduces tariffs on selected food and agricultural items:

Rice (bulk or 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% (down from 70%)

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

Refined salt: 55% (down from 70%)

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However, wheat or meslin flour remains at 70 percent.

The Import Adjustment Tax (IAT) on crude palm oil has been fixed at a total effective rate of 28.75 percent, representing a downward revision from earlier tariff structures.

To support local industries, tariffs on several steel and industrial inputs have also been lowered:

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

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

Electroplated steel: 35% (from 45%)

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

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

Cold-rolled steel (<0.25% carbon): 15%

Electrical and mechanical equipment also witnessed reductions:

Electrical apparatus such as fuses: 10% (from 20%)

Automatic circuit breakers: 10% (from 20%)

Lamp holders: 10% (from 20%)

Air and vacuum pumps, compressors: 5% (from 10%)

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

Agricultural and manufacturing machinery, breathing appliances and gas masks now attract zero percent duty, down from five percent.

Other notable revisions include: Antimalarial medicaments: 20%; Margarine (excluding liquid): 40%; Envelopes: 40% (from 50%); Diaries and 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%); Green Tax and Excise Regime

While lowering several import duties, the government also introduced a new excise duty regime and a green tax surcharge scheduled to take effect from July 1, 2026.

However, certain categories will be exempted from the green tax surcharge, including:; Vehicles below 2000cc; Mass transit buses (Heading 87.02)Electric vehicles; Locally manufactured vehicles under specified tariff headings (87.06–87.13); Transition Window for Importers

To ease implementation, the government granted a 90-day grace period for importers who opened Form ‘M’ before April 1, 2026. Such importers will be allowed to clear their goods at the old tariff rates within the window.

The government said the 2026 Fiscal Policy Measures are part of broader reforms aimed at striking a balance between revenue generation and economic stimulation.

Officials noted that the adjustments are designed to reduce production costs for manufacturers, encourage investment in strategic sectors, support local industries, and cushion the impact of high import costs on businesses and consumers.

With the changes now gazetted, stakeholders across agriculture, manufacturing, transport and healthcare sectors are expected to closely monitor the impact of the revised tariff regime in the months ahead.