According to the new financial act, import duty for car is now 5% and 10% for mass transit vehicles.

Jonathan increased import duties for cars and mass transit vehicles to 30% and 35% respectively to encourage local manufacturers but President Buhari reduced them to 5% and 10% respectively.

Can any Economist explain the implication of this policy? I thought we should be increasing the duty to 40% and 45% respectively. Why is the President crashing them?

Probably because of the lust for foreign products, many business owners had result to import goods from neighbouring countries. The government looses more revenue while neighbouring countries gain. In order to capture these importers into the tax net, this regime had to reduce import duties. This is a bad policy on the long run since the infant industries might be affected. Secondly there might be high demand for forex which may deplict the foreign reserve.