The Centre for the Promotion of Private Enterprise (CPPE) has urged the Federal Government to reduce import duties on renewable energy equipment to 5% and grant a full Value Added Tax (VAT) waiver to address Nigeria’s energy challenges.
The recommendation was contained in a policy brief reviewing the 2026 Fiscal Policy Measures and Tariff Amendments, highlighting concerns over the high cost of solar batteries and inverters.
According to the CPPE, the current pricing of these products remains prohibitive for most households and small businesses, limiting access to reliable and clean energy alternatives.
What CPPE is saying
The think tank said lowering tariffs on renewable energy components would significantly improve access to alternative power solutions and enhance productivity.
- “Import duty on these products should be reduced to 5%, with a full VAT waiver to make clean energy more accessible,” the CPPE stated.
It noted that high costs of solar batteries and inverters continue to restrict adoption among households and small enterprises.
The group also recommended reducing import duties on mass transit buses to 5% with a full VAT waiver to encourage private sector investment in public transportation.
CPPE further proposed capping tariffs on used passenger vehicles (2000cc and below) at 25%, arguing that current rates exceeding 50% place a heavy burden on the middle class and hinder growth in e-hailing and logistics sectors.
The organisation maintained that these measures would ease cost pressures, improve mobility, and support broader economic activity.
Get up to speed
The recommendations come shortly after the Federal Government introduced new fiscal measures and tariff adjustments.
The 2026 Fiscal Policy Measures, which took effect on April 1, include Supplementary Protection Measures aligned with the ECOWAS Common External Tariff framework.
- The policy introduced an Import Adjustment Tax (IAT) on 192 tariff lines and an import prohibition list covering 17 items from non-ECOWAS countries.
- It also includes a national list of 127 items with reduced import duties to support key sectors.
- Tariffs on fully built passenger vehicles have been reduced to about 40% from previous levels of 70%, while crude palm oil now attracts an effective rate of 28.75%.
These reforms are part of broader efforts to balance revenue generation with economic growth.
More insights
While acknowledging the government’s push to promote domestic production, CPPE identified gaps in policy implementation.
The group noted the absence of tariff protection for locally refined petroleum products despite significant private sector investments.
It argued that protective tariffs are needed to safeguard investments, conserve foreign exchange, and strengthen energy security.
CPPE also warned that while the reforms create opportunities for manufacturers and agro-processors, they could pose structural risks for import-dependent businesses.
The think tank emphasised the need for a balanced approach that supports both local production and economic stability.
What you should know
The proposed reforms align with Nigeria’s broader fiscal and environmental objectives.
Recent policies aim to integrate environmental considerations into the tax framework while boosting government revenue.
- New levies on vehicles are structured based on engine capacity, with incentives designed to promote cleaner alternatives.
- The measures form part of a wider set of fiscal reforms, including revised import tariffs and excise duties.
The CPPE’s recommendations add to ongoing policy debates on how best to address Nigeria’s energy deficit while supporting economic growth and affordability.
