By Oluyinka Onigbinde
Former Acting National President of the Association of Nigerian Licensed Customs Agents, Dr. Kayode Farinto, has thrown his weight behind the Federal Government’s implementation of the Green Tax on imported vehicles, describing the policy as long overdue and consistent with global environmental standards.
Farinto, who has been one of the leading voices in customs and port sector advocacy, argued that the introduction of the environmental levy should not be viewed in isolation, insisting that importers are, in fact, better off under the new tariff regime because the government simultaneously reduced the Import Adjustment Tax (IAT) on used vehicles from 15 per cent to five per cent.
According to him, while importers will now pay a Green Tax surcharge of between two and four per cent depending on a vehicle’s engine capacity, the overall duty payable on imported used vehicles has reduced significantly.
“I’ve been doing advocacy in the last 15 years and we have never seen a government that is as listening as this one,” Farinto said.
“We asked for either the reduction or total abrogation of the 15 per cent levy on used vehicles. Government came out with a better version by reducing it to five per cent while introducing a two or four per cent Green Tax. That is a welcome development.”
He explained that contrary to public perception, the Green Tax is neither a new nor unusual policy, noting that many developed countries have long imposed environmental charges on high-emission vehicles.
Drawing from personal experience, Farinto recalled paying a substantial environmental charge while driving an older diesel-powered Mercedes-Benz in the United Kingdom during a training programme.
“I drove a Mercedes-Benz 190 to Heathrow Airport and had to pay about £30 just because the vehicle did not meet modern emission standards. Nigeria is actually overdue in implementing this policy,” he said.
Farinto stressed that the Green Tax is part of Nigeria’s effort to comply with international environmental commitments aimed at reducing carbon emissions and protecting the ozone layer.
According to him, the policy also complements existing government incentives designed to encourage the importation of cleaner vehicles.
He disclosed that importers bringing fully electric vehicles into Nigeria currently enjoy zero import duty upon approval by the Federal Government.
“If you import electric vehicles and apply to the Federal Government through the Ministry of Finance, you receive approval for zero duty. I have personally facilitated this process for some importers on several occasions,” he revealed.
He argued that while electric vehicles deserve incentives, owners of older fossil-fuel-powered vehicles should reasonably expect to pay environmental surcharges because of their carbon emissions.
Farinto further dismissed claims that the Green Tax would increase the overall cost of vehicle importation, insisting that the reduction in the Import Adjustment Tax more than offsets the new surcharge.
“We are using one stone to kill two birds. Import duties have reduced while Nigeria is also complying with international environmental reforms. Overall, vehicle import duty has come down,” he said.
Explaining how the surcharge would apply, Farinto noted that vehicles with engine capacities between 2.0 and 2.4 litres would attract a two per cent Green Tax, while larger luxury Sport Utility Vehicles (SUVs) above the prescribed threshold would pay four per cent.
He maintained that owners of luxury vehicles should naturally bear higher environmental costs because of their larger engines and higher emissions.
The former ANLCA president also defended the government’s continued protection of Nigeria’s emerging automobile assembly industry, saying authorities must strike a balance between encouraging local manufacturing and allowing vehicle imports.
