Nohena Insights · Policy & Tariffs
How the 2026 Finance Act affects import levies
The 2026 Finance Act impacts import levies by adjusting specific excise duties, introducing targeted concessions, and refining the administrative framework for tax collection. This analysis breaks down the practical implications for Nigerian importers and their clearing agents, f
Nohena · 16 October 2026 · 8 min read
How the 2026 Finance Act affects import levies
The 2026 Finance Act primarily impacts import levies by adjusting specific excise duties, introducing targeted concessions, and refining the administrative framework for tax collection, rather than by overhauling the entire tariff structure. As an annual instrument for amending Nigeria's fiscal laws, the Finance Act is a critical document for every importer and licensed agent to understand. Its provisions directly influence the final landed cost of goods, often in ways that go beyond the headline customs duty rate.
This analysis breaks down the key changes, their practical effect on customs declarations, and the strategic considerations for maintaining compliance and cost-efficiency in your import operations. Understanding these nuances is essential for preparing accurate declarations and anticipating the final charges assessed by the Nigeria Customs Service.
What is the purpose of the Finance Act?
The Finance Act serves as the primary legislative tool for amending Nigeria's various tax and fiscal laws to support the government's annual budget and economic policies. It is an annual exercise designed to make the country's tax system more responsive to immediate economic needs, allowing for more agile adjustments than a complete overhaul of foundational laws like the Customs and Excise Management Act.
Key characteristics of the Finance Act include:
Broad scope: It simultaneously amends multiple pieces of legislation, such as the Companies Income Tax Act, the Value Added Tax Act, and the Customs and Excise Tariff Act.
Policy driver: The Act is used to introduce fiscal measures intended to stimulate certain economic sectors, discourage specific consumption patterns, or protect local industries.
Revenue generation: A core function is to update tax laws to meet government revenue targets as outlined in the federal budget.
Administrative refinement: It often includes provisions that clarify tax administration, streamline collection processes, and close perceived legal loopholes, sometimes affecting data privacy and compliance under frameworks like the Nigeria Data Protection Act (NDPA).
It is crucial to distinguish the Finance Act's role from that of the ECOWAS Common External Tariff (CET). The CET establishes the harmonized customs duty rates for goods imported into the West African sub-region, organized into bands (typically 0%, 5%, 10%, 20%, and 35%). The Finance Act generally does not alter these CET bands; instead, it adds, removes, or modifies other levies, duties, and taxes that are applied on top of the base CET duty.
How the 2026 Finance Act changes import levy calculations
The 2026 Finance Act modifies import levy calculations by introducing new excise categories, adjusting existing rates on specific goods, and clarifying the application of certain taxes like value added tax on imports. These changes require careful attention during the preparation of a customs declaration, as they directly affect the total payable amount.
Adjustments to excise duties on imports
A significant number of changes in any Finance Act relate to excise duties. These are taxes levied on specific goods, whether locally produced or imported, often to discourage consumption or to tax high-volume, non-essential items. The 2026 Act continues this trend by:
Introducing new excise categories: Certain goods not previously subject to excise may now attract the levy. This is often targeted at luxury goods, products with negative environmental externalities, or new technology products.
Adjusting existing rates: Rates for traditional excisable goods like tobacco and alcoholic beverages may be updated to reflect inflation or public health policies.
Tying levies to HS codes: The applicability of any excise duty is strictly determined by the product's 10-digit Harmonized System (HS) code. An incorrect classification could lead to either underpayment and subsequent penalties or overpayment of duties.
Changes to value added tax application
While the standard VAT rate remains 7.5%, the Finance Act can alter the mechanics of its application to imports. The basis for calculating VAT on imported goods is the sum of the Cost, Insurance, and Freight (CIF) value, plus the customs duty, surcharge, and any other applicable levies. The 2026 Act may affect this by:
Revising the VAT exemption list: The list of goods and services exempt from VAT can be amended, bringing previously exempt items into the tax net or vice versa. This is a common mechanism for incentivizing critical sectors like agriculture or pharmaceuticals.
Clarifying VAT on imported services: The Act may provide further clarity on the tax treatment of services ancillary to the importation of goods, which can sometimes be a source of dispute.
Introduction of special levies or concessions
The Finance Act is the legal vehicle for introducing new, targeted levies or providing specific relief. These are policy instruments used to achieve precise economic objectives. For 2026, this could manifest as:
New levies: The government might introduce a special levy on a temporary or permanent basis to fund a specific initiative, such as a green tax on polluting items or a telecommunications levy.
Concessions and waivers: To promote investment in priority areas, the Act can formalize duty concessions for specific types of machinery, raw materials, or components, such as those used in renewable energy or local manufacturing. Claiming these requires robust documentation.
Navigating the practical steps for compliance
Compliance with the new Finance Act provisions requires meticulous documentation and accurate declaration, starting with the correct classification of goods and the proper completion of the Form M. Adherence to the correct procedure is the most effective way to manage risk and avoid costly delays.
Confirm the HS code: This is the foundational step. Every change in the Finance Act is tied to a specific HS code. You must verify that your goods are classified under the correct 10-digit heading in the Nigerian tariff book, as this determines the applicable duty, excise, and other levies.
Update Form M and PAAR process: The declaration process begins with the Form M. The information provided here forms the basis for the Pre-Arrival Assessment Report (PAAR) issued by the NCS. Ensure that the product descriptions and values are precise to receive a PAAR that reflects the correct, post-Finance Act calculations.
Ensure accurate valuation: The customs value, which is the basis for most duties, must be determined according to the principles of the WTO's Agreement on Customs Valuation. While the Finance Act adds levies on top of this value, the correctness of the base value itself remains paramount. This includes correctly accounting for freight and insurance, where a default of 1.5% of the FOB value is used for insurance if an actual certificate is not presented.
Prepare documentation for concessions: If your goods are eligible for a new concession under the Act, prepare the necessary proof. This could include certificates of origin for goods imported under the African Continental Free Trade Area (AfCFTA), end-user certificates for specific machinery, or product certifications from bodies like the Standards Organisation of Nigeria (SON) or NAFDAC.
Prepare the Single Goods Declaration (SGD): The final declaration, the SGD, must consolidate all this information accurately. It is the formal entry lodged with customs, and its data must align with the laws in effect at the time of lodgement. A robust preparation process helps ensure the SGD is ready for submission without errors. Nohena prepares a lodgement-ready declaration and document pack; the licensed agent lodges.
For more analysis on customs and trade policy, you can review our other articles in our insights section .
Decision support: assessing the impact on your supply chain
Importers can assess the Finance Act's impact by conducting a line-by-line analysis of their key imported products against the new schedules of duties and levies. This structured review allows you to quantify the financial impact and develop a strategic response. You can use a simple framework to guide this analysis.
Consider the following table as a template for evaluating your top import items:
This exercise helps translate abstract policy changes into concrete financial figures. A potential strategic action could be to explore sourcing from AfCFTA member states. If a product meets the rules of origin criteria, such as the ~40% regional value content threshold, it may be eligible for preferential duty rates, mitigating the impact of increased levies on imports from outside the continent. Foresight for Nigerian import clearance provides a way to see how these complex rules will apply to a declaration before you lodge.
FAQ
When does the 2026 Finance Act take effect?
A Finance Act typically takes effect on the date it is signed into law by the president, or on a specific commencement date stipulated within the Act itself. For importations, the applicable duties and levies are those in force on the date the customs declaration is lodged with the Nigeria Customs Service, regardless of when the goods arrived or when the Form M was initiated.
Does the Finance Act change the 1.5% default for insurance?
The Finance Act does not typically amend the default percentage for insurance in customs valuation. This is governed by customs valuation regulations, which mandate that 1.5% of the Free on Board (FOB) value is used to calculate the insurance component of the CIF value when an actual insurance certificate is not provided as part of the documentation.
How does the Finance Act affect goods imported under the AfCFTA?
The Finance Act primarily affects AfCFTA goods if it imposes new non-tariff levies, such as excise duties or special taxes, that apply to all goods irrespective of origin. The preferential duty rates under the AfCFTA are governed by the trade agreement itself, but these additional domestic levies may still be applicable unless a specific exemption is granted.
Can I challenge a customs assessment based on the new Finance Act?
Yes, an importer or their licensed agent has the right to challenge a customs assessment through established dispute resolution channels within the Nigeria Customs Service. A challenge can be made if there is a belief that the provisions of the Finance Act or other tariff laws have been misinterpreted or misapplied to a specific declaration.