• Nigeria has suspended the implementation of a 4% tax on the Free Government halts 4% import duty after backlash from businesses and importers.
• Tax was meant to fund customs modernization but sparked price hike concerns.
• Move comes amid 20.12% inflation and growing public anger over living costs.

Nigeria has suspended the implementation of a 4% tax on the Free on Board (FOB) value of imported goods, Finance and Economy Minister Wale Edun announced in a circular cited by local media.

The levy, first introduced in February 2025 before being withdrawn and later reinstated in August, was provided for under the 2023 Nigeria Customs Service Act. It was intended to replace two existing charges: a 1% Comprehensive Import Supervision Scheme (CISS) levy and a 7% customs processing fee. Officials had presented it as a more sustainable funding mechanism for the Nigeria Customs Service (NCS), designed to support digital systems such as the B’odogwu clearance platform, improved risk management tools, and non-intrusive inspections.

Despite these aims, the measure drew heavy opposition from manufacturers, importers, shippers, and freight forwarders, who warned it would drive up prices. Announcing the suspension, Edun admitted the tax posed serious risks. “Following extensive consultations with industry stakeholders, trade experts, and relevant government officials, it has become clear that the implementation of the 4% FOB charge poses significant challenges to Nigerian trade facilitation, the business environment, and economic stability,” he said in a statement.

The decision comes against a backdrop of economic fragility. Inflation stood at 20.12% in August 2025, only slightly down from earlier highs. Nigeria imported nearly $47 billion worth of goods in 2024, according to Trademap, underscoring its reliance on foreign supplies of fuel, grains, vehicles, machinery, and pharmaceuticals.

Since taking office, President Bola Tinubu has rolled out sweeping reforms, including the removal of fuel subsidies. Combined with ongoing volatility of the naira, these measures have pushed up living costs and fueled social tensions. The government says it does not plan to increase taxes but will instead enforce existing regulations more strictly.

Just weeks ago, the administration faced protests from the Trade Union Congress (TUC) after announcing a 5% surcharge on petroleum products. Edun later clarified the levy would only take effect in January 2026. The suspension of the 4% import duty follows the same strategy of easing tensions and preventing further unrest in a strained economic climate.