FG Green Tax: 2-4% Levy on High-Engine Vehicles From July 1 as Nigerians Push Back

Nigerians who drive vehicles with bigger engines are about to pay more at the point of import or purchase. The Federal Government has rolled out a new “Green Tax” that will slap a 2% to 4% surcharge on vehicles with engine capacities of 2000cc and above, effective July 1, 2026.

Here’s how it breaks down: vehicles between 2000cc and 3999cc will attract a 2% levy, while anything 4000cc and above gets hit with 4%. The idea is to discourage high-emission vehicles in line with Nigeria’s climate commitments, but the reality on the ground may look very different.

Exemptions and grace period

Not every vehicle is caught in the net. Cars under 2000cc, electric vehicles, mass transit buses, and locally manufactured vehicles are all exempt. The government has also given importers and manufacturers a 90-day grace period to adjust to the new regime before enforcement kicks in fully.

But for ordinary Nigerians already stretched thin by fuel costs and inflation, a new tax on vehicles — no matter how environmentally justified — is a hard sell.

Pushback from economists

Dr Muda Yusuf, CEO of the Centre for the Promotion of Private Enterprise (CPPE), put it plainly: “In theory, green taxes are meant to discourage high-emission consumption, but in Nigeria’s context, this may simply translate into higher costs for already burdened citizens.”

That’s the core tension. The policy looks progressive on paper, but in a country where most people are still recovering from subsidy removals and a cost-of-living crisis, another levy — even one dressed in green — feels like one burden too many.

Sources: Nairametrics, New Telegraph, Reuters