Nigeria introduced a Green Tax surcharge in April 2026, effective July 1, imposing a 2-4% levy on high-engine vehicles while exempting EVs and locally made vehicles. Industry experts warn that without transparent reinvestment of the revenue into renewable energy, recycling, and low-carbon technologies, the tax will raise production costs, worsen inflation, and hurt local manufacturers' competitiveness. They stress that taxing businesses without providing affordable alternatives like solar power or biodegradable materials undermines both industrial growth and the country's green transition. Stakeholders from the Manufacturers Association of Nigeria and the Lagos Chamber of Commerce and Industry call for a suspension or transition period, citing inadequate consultation and the risk of higher consumer prices. They also point out that Nigeria still relies heavily on internal combustion engine vehicles and diesel-powered haulage, making an immediate shift to cleaner options difficult. The policy's success hinges on transparent reinvestment of tax revenues into renewable energy, recycling programs, and cleaner technologies, rather than becoming an additional burden on industry.
