The Presidential Fiscal Policy and Tax Reforms Committee has dismissed reports that the Nigeria Tax Act 2025 imposes a 25 per cent tax on building materials, construction funds, and related bank transactions.
The clarification was contained in a statement issued on Sunday and shared by the committee’s chairman, Taiwo Oyedele, following a viral video by former Minister of Transportation, Rotimi Amaechi.
According to the committee, the new law has already taken effect and does not contain any provision imposing a 25 per cent levy on construction materials, bank balances, or business expenses linked to property development.
The panel described the claims circulating online as false and misleading, stressing that the law is structured to reduce housing costs, stimulate real estate development, and provide relief to tenants and small-scale contractors.
Committee’s Position
The committee directly addressed the statements made in the viral video, saying they were based on inaccurate interpretations of the new tax framework.
It stated that the Nigeria Tax Act 2025 does not impose a 25 per cent charge on construction funds, bank accounts, or business transactions. Officials warned that such misinformation could create unnecessary panic among investors, developers, and the general public.
In the video, Amaechi alleged that payments for building materials would attract a 25 per cent deduction and that the burden would ultimately be transferred to tenants and property buyers. The committee, however, insisted that no such provision exists in the law.
Background to the Debate
The clarification comes amid heightened political commentary ahead of the 2027 general elections, with some public figures raising concerns about potential economic hardship under new fiscal policies.
The committee said the Nigeria Tax Act 2025 forms part of a broader reform agenda aimed at simplifying tax administration, expanding the tax base, and offering targeted incentives to priority sectors, including housing and real estate.
Key Reliefs in the Law
According to the committee, the new tax framework introduces several incentives designed to lower construction and housing costs.
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Land and buildings are exempt from Value Added Tax, reducing acquisition and transaction costs.
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Contractors can recover input VAT on qualifying materials, equipment, and overheads.
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Withholding tax on construction contracts has been reduced to 2 per cent to improve cash flow for developers.
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Individuals building owner-occupied homes can deduct mortgage interest for tax purposes.
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Landlords can deduct repair, insurance, and agency costs before calculating taxable rental income.
The law also includes direct relief for tenants and incentives for investors.
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Rent relief of up to ₦500,000, capped at 20 per cent of annual rent.
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VAT exemption on residential rent.
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Stamp duty relief on qualifying lease agreements.
Effective Date
The committee noted that the Nigeria Tax Act 2025 and related reforms became effective on January 1, 2026, after being signed into law in June 2025. The reforms are expected to provide a new framework for taxation, administration, and revenue generation in the country.
