FG slashes import duties on rice, cars, drugs in new tariff policy

The Federal Government has rolled out the 2026 Fiscal Policy Measures (FPM), unveiling broad revisions to import tariffs in a bid to boost performance in strategic sectors of the economy.

Details of the approval were contained in an April 1, 2026 document signed by the Minister of Finance, Wale Edun. The newly introduced framework replaces the 2023 FPM.

Central to the policy is a comprehensive adjustment of duties across 127 tariff categories, including rice, sugar, automobiles, and industrial materials. According to the government, the cuts are intended to “promote and stimulate growth in critical sectors of the economy”.

As part of the changes, the Import Adjustment Tax (IAT) on items such as crude palm oil has been fixed at an effective rate of 28.75 percent, reflecting a reduction from previous levels.

In the automobile segment, duties on fully assembled passenger vehicles including SUVs and station wagons have been lowered to 40 percent, down from the 70 percent set under the 2015 FPM.

To cushion the transition, authorities approved a 90-day grace window for importers who had opened Form ‘M’ before April 1, allowing them to clear consignments using the old tariff rates.

The policy also introduces a fresh excise duty structure along with a green tax surcharge, both slated to commence on July 1, 2026.

Key Tariff Adjustments:

Below is a breakdown of the revised duties as outlined in the official gazette:

Antimalarial medicaments: 20%

Rice (bulk or >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/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 (<7 cm): 35% (from 40%)

Steel and Industrial Inputs

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

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

Electroplated steel: 35% (from 45%)

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

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

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

Other Key Adjustments:

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

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

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

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

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

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

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

Automatic circuit breakers: 10% (from 20%)

Lamp holders: 10% (from 20%)

Green Tax Exemptions:

The framework also lists items excluded from the proposed 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 noted that the reforms are designed to strike a balance between revenue mobilisation and economic expansion, while supporting domestic industries and reducing the cost of essential imports.