Customs exempts CNG, electric vehicles from import duty and VAT under new guidelines

Importers must obtain IDEC from Federal Ministry of Finance to benefit; hybrid vehicles, luxury cars above $100,000 and overseas-converted CNG vehicles remain fully taxable.

The Nigeria Customs Service (NCS) has announced the implementation of additional guidelines issued by the Federal Ministry of Finance for fiscal incentives under the Presidential Gas for Growth Initiative, exempting specified gas-powered and electric vehicles, equipment and components from import duty and Value Added Tax (VAT).

The guidelines were contained in a press release issued by the NCS under the leadership of Comptroller-General of Customs Bashir Adewale Adeniyi, MFR, in furtherance of President Bola Ahmed Tinubu’s commitment to promoting cleaner energy alternatives and sustainable transportation solutions.

What qualifies for full import duty and VAT exemption

The approved categories eligible for full exemption from both import duty and VAT are:

100% Compressed Natural Gas (CNG) vehicles
100% Liquefied Petroleum Gas (LPG) vehicles
100% Battery Electric Vehicles (EVs)
Extended Range Electric Vehicles (EREVs) with a minimum pure electric driving range of 200 kilometres
CNG and LPG conversion kits for petrol and diesel-powered vehicles
Tricycles and motorcycles certified for resale by the Federal Ministry of Finance
Semi-trailers equipped with skid-mounted CNG, LPG and Liquefied Natural Gas (LNG) storage tanks for gas distribution.

The Customs Service said the incentives are designed to encourage investment in cleaner transport technologies and support Nigeria’s transition to alternative fuels.

How to access the incentives

Importers seeking to benefit from the exemptions are required to obtain an Import Duty Exemption Certificate (IDEC) issued by the Federal Ministry of Finance and comply with all applicable regulatory requirements governing the importation of eligible items. The IDEC is a mandatory prerequisite importers who do not obtain the certificate before clearing their goods will not qualify for the duty and VAT waivers regardless of whether the items fall within the approved categories.

Items Excluded from the Incentives

The approved fiscal framework also specifies categories that will remain fully subject to import duty and VAT. These include Hybrid Electric Vehicles, covering Electric/Petrol and Electric/Diesel variants; dual-fuel Internal Combustion Engine (ICE) vehicles configured for CNG/Petrol or CNG/Diesel operations; luxury vehicles valued at USD 100,000 and above; CNG vehicles converted overseas without factory-fitted CNG capability; semi-trailers and flatbeds that are not self-driven or operated under their own mechanical drive; and spare parts of all kinds.

The policy objective behind the incentives

The NCS said the implementation of these fiscal incentives is intended to support the Federal Government’s broader objectives of reducing transportation and energy costs, encouraging investment in clean energy infrastructure, expanding the adoption of alternative fuel technologies, and strengthening Nigeria’s energy security and environmental sustainability agenda.

The service urged all stakeholders, importers, licensed customs agents, and other operators within the trade ecosystem to ensure strict compliance with the applicable guidelines and regulatory requirements, describing its commitment to the effective and transparent implementation of the incentives as unwavering under the current management team.