The Centre for the Promotion of Private Enterprise has urged targeted tariff adjustments to strengthen domestic refining, improve mobility, and expand nationwide access to renewable energy.

CPPE CEO Muda Yusuf made the call in a statement on Sunday, in response to the 2026 Fiscal Policy Measures and Tariff Amendments.

The framework signals a strategic shift towards domestic production, deeper industrialisation, and reduced import dependence.

Measures include revisions to the Import Adjustment Tax across 192 tariff lines, selective import restrictions, lower tariffs on inputs, excise adjustments, and green taxes on imported vehicles.

Mr Yusuf said the framework offered opportunities and risks, depending on sector positioning and business models. He highlighted higher tariffs on imported finished goods, including food, plastics, textiles and metals, with combined levies ranging from 20 to 70 per cent.

“This measure raises import costs and strengthens domestic producers’ competitiveness. Given reliance on imports, the policy could significantly reshape market dynamics,” Mr Yusuf said.

He noted agro-processing, light manufacturing, packaging and metals could benefit, with improved capacity utilisation expected. However, he warned that import-dependent firms face adjustment challenges under the policy.

According to him, higher tariffs will raise costs for traders, compress margins and reduce sales volumes.

Mr Yusuf expressed concern over the policy’s relatively soft fiscal stance on petroleum product imports. He said fiscal protection was needed to consolidate domestic refining gains and attract investment.

The CPPE boss noted local refineries lacked tariff protection, describing it as a gap compared with other sectors.

“Protective tariffs for locally refined products are vital for investment security, energy stability, foreign exchange conservation, and macroeconomic strength,” he said.

Mr Yusuf urged a review of the 40 per cent tariff on used vehicles with an engine capacity below 2000cc. He said additional charges pushed rates above 50 per cent, making them excessive for a road-dependent economy.

The CPPE boss warned that the policy limits vehicle access and constrains jobs in e-hailing and car-hire services. He recommended reducing tariffs on such vehicles to a maximum of 25 per cent, inclusive of all charges.

Regarding the automotive sector, Mr Yusuf called for a more supportive tariff regime to boost local assembly. He proposed tariffs not exceeding five per cent for semi-knocked-down parts and zero duty for completely knocked-down parts.

Mr Yusuf also urged lower duties on mass transit buses to five per cent, alongside a full VAT waiver.

Mr Yusuf said this would incentivise private investment and encourage organisations to provide staff transport.

The CPPE chief advocated lower tariffs on renewable energy equipment, particularly batteries and inverters, to improve affordability. He recommended reducing import duty to five per cent and granting full VAT waivers.

Mr Yusuf said current costs remained prohibitive for households and small businesses. He added the measure would offer alternatives to unreliable grid power and boost productivity.

He said, “The 2026 fiscal measures mark a bold step towards restructuring, industrialisation and resilience. For investors, there is strong potential in manufacturing and green industries, but risks remain for import-dependent and consumer-facing sectors.” 

(NAN)