Green Surcharge: FG Targets N2.6 Trillion Revenue from Taxes on Imported Vehicles
By Yemi Olakitan
The Federal Government of Nigeria has unveiled plans to raise substantial tax revenues, totaling over N2.6 trillion, through the introduction of a “green surcharge on imported vehicles” via the Nigerian Customs.
This initiative, which forms a crucial part of an overarching strategy to boost tax collections, has been revealed in the recently released Medium Term Expenditure Framework (MTEF) that outlines a substantial N26 trillion budget for 2024.
The MTEF document outlines 18 specific measures to enhance Customs revenue collection between 2024 and 2026, with the thirteenth point focusing on the implementation of a green surcharge on imported automobiles.
The exact details of this surcharge are yet to be fully clarified, as the paper lacks a comprehensive justification.
To realize this goal, the Federal Government has already set in motion the Import Adjustment Tax (IAT) levy on motor vehicles, effective from June 1, 2023.
This levy imposes a 2% rate on vehicles with 2-liter engines (ranging from 2000 cc to 3999 cc) and a 4% rate on vehicles with engines exceeding 4 liters (ranging from 4000 cc and above).
Exemptions have been granted to certain vehicle categories, including those with engines under 2000cc, public transportation buses, electric cars, and locally produced automobiles.
It’s worth noting that there appears to be some confusion regarding whether the taxes mentioned and the green surcharge are identical. Further investigation is required to shed light on this matter.
The National Bureau of Statistics reports that Nigeria expended over N1.68 trillion on vehicles, aircraft, vessels, and associated goods.
The introduction of a green tax on imported vehicles underscores the government’s commitment to boosting revenue while potentially promoting the adoption of more environmentally friendly transportation options.
Nevertheless, additional information on the scope and implications of this surcharge is eagerly anticipated.