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A Professor of Law, Auwalu H. Yadudu, has expressed serious concern over alleged discrepancies between tax laws passed by the National Assembly and the versions later gazetted by the Federal Government, warning that the situation amounts to a possible usurpation of legislative powers.

In a detailed commentary released on Thursday, Yadudu said his review of documents highlighting differences between Acts passed by lawmakers and their gazetted counterparts led him to the conclusion that elements within the Executive arm may have unilaterally altered the laws to advance a tax reform agenda outside constitutional processes.

His remarks followed a motion raised on the floor of the House of Representatives on Wednesday by Abdussamad Dasuki, representing Kebbe/Tambuwal Federal Constituency in Sokoto State, who alleged a breach of legislative privilege. Dasuki told lawmakers that provisions of four tax bills debated, harmonised, and passed by both chambers were materially different from what appeared in the official Gazette.

Yadudu said if the allegations are verified, they strike at the foundation of constitutional governance and legislative autonomy. He questioned how laws that underwent public debate, committee scrutiny, and public hearings could later emerge with new provisions inserted or duly passed clauses removed.

Citing specific examples from the Nigeria Tax Administration Act, the law professor pointed to changes affecting petroleum income tax and value-added tax provisions, which he said undermined legislative consensus and introduced internal contradictions. He also highlighted a provision in the gazetted version mandating the use of the United States dollar as the sole currency for computing tax obligations, contrary to the version passed by lawmakers, which permits computation in any currency relevant to the transaction.

According to Yadudu, the gazetted law further introduced a requirement compelling taxpayers to pay 20 per cent of a disputed tax assessment before filing an appeal, a provision he said was absent from the law approved by the National Assembly and potentially unconstitutional.

He also criticised provisions granting tax authorities garnishee powers without court orders, warning that such measures weaken procedural fairness and judicial oversight. Yadudu noted that while the law passed by lawmakers requires court authorisation for garnishee actions, the gazetted version exempts certain tax authorities from this requirement.

“These discrepancies are not minor drafting errors,” Yadudu said, adding that they raise fundamental questions about legality, accountability, and respect for the separation of powers. He warned that the credibility of the entire tax reform exercise had been severely undermined, further eroding public trust.

The professor called on both chambers of the National Assembly to conduct a transparent and comprehensive investigation to determine how the changes were introduced and who authorised them. He also questioned the proposed January 1, 2026, commencement date for the tax reforms, warning that enforcing laws under a cloud of alleged illegality could expose the government to extensive litigation and uncertainty.

Proceeding without resolving the controversy, he cautioned, would risk legitimising impunity and further weakening legislative authority.

Earlier, Rep. Dasuki had informed the House that his comparison of the gazetted laws with the Votes and Proceedings and harmonised versions adopted by both chambers revealed inconsistencies he described as a clear breach of legislative privilege.

The post Tax Law Discrepancies Amount to Legislative Usurpation — Prof Yadudu Warns appeared first on Housing TV Africa.

The Federal Inland Revenue Service has clarified that the controversial 4% Development Levy introduced under Nigeria’s new tax reforms is not a new tax, but a consolidation of multiple existing charges aimed at simplifying compliance and improving economic competitiveness.

The Federal Inland Revenue Service has moved to calm public concerns over the newly enacted Nigeria Tax Act and Nigeria Tax Administration Act, insisting that the 4% Development Levy being widely debated is not an additional burden on businesses.

In a statement issued on Tuesday, the agency said the levy merely merges several pre-existing payments—including the Tertiary Education Tax, NITDA Levy, NASENI Levy and Police Trust Fund Levy—into a single, predictable charge. According to the FIRS, this consolidation eliminates multiple agency-level collections, reduces compliance costs, and offers clearer fiscal planning for businesses.

The tax agency said the reform is part of a broader strategy to make Nigeria’s business environment more competitive, while providing long-term fiscal stability and restoring investor confidence.

It added that small businesses and non-resident companies remain exempt, ensuring that vulnerable enterprises are not exposed to additional financial pressure.

Tax analysts say the 4% levy reflects a global push for clearer and more coordinated tax structures. “The consolidation sends a signal to investors that Nigeria is moving away from fragmented, unpredictable levies and toward a modern tax regime,” a Lagos-based analyst told our correspondent.

Amid speculation that the government was rolling back Free Trade Zone incentives, the FIRS clarified that FTZs retain their tax-exempt status. Under the new law, FTZ companies may sell up to 25% of their goods locally without losing incentives, and have been granted a three-year transition period to adjust to the new rules.

On the newly introduced 15% minimum Effective Tax Rate for large domestic and multinational firms, the agency said the move aligns Nigeria with a global tax agreement endorsed by more than 140 countries under the OECD/G20 tax framework. Without adopting the rule, the FIRS warned, Nigeria risked losing substantial revenue to “Top-Up Tax” collections abroad.

The reforms also overhaul capital gains taxation—now termed “chargeable gains”—introducing incentives such as reinvestment relief for investors who redirect proceeds into Nigerian companies within the same year. Experts say this single provision could unlock new capital for startups, private equity, and emerging industries.

The FIRS maintained that the tax reforms were designed to strengthen fiscal stability, deepen investor confidence and ensure a more predictable environment for businesses.

The post FIRS Clarifies 4% Development Levy, Says New Tax Laws Will Cut Costs, Boost Investment appeared first on Housing TV Africa.

Speaking at a media briefing organized for the Institute’s Valuation Day, Alonge praised the bill’s intent to relieve the financial strain on low-income citizens while reshaping the broader tax system for greater transparency. However, he warned that the new system, while fairer, may bring unintended burdens—particularly for those not used to full financial disclosure.

“The aim is clear: ease the weight of taxation on those earning the least, and create a system where everyone contributes based on what they truly earn,” Alonge explained. “Under the current system, the poor are paying disproportionately. When you consider the percentage of a low-income earner’s salary going to tax compared to a wealthy individual, you’ll see the imbalance.”

According to Alonge, the bill eliminates taxes on certain forms of property income—such as rental earnings—marking a relief for small landlords and homeowners. “Charges like stamp duties and rental income tax will no longer apply, which is a huge relief for many,” he said.

Describing the reform as “a step in the right direction,” Alonge emphasized its potential to benefit underserved communities. “This bill, if properly implemented, will lift more people out of poverty. But it will also usher in stricter tax enforcement,” he noted.

He cautioned that the new structure will require fuller financial transparency from citizens, as enforcement mechanisms tighten. “We haven’t really seen consequences for tax evasion before now. That’s about to change. People will have to declare all sources of income, and failure to do so might come with serious repercussions.”

Addressing systemic issues, Alonge criticized what he sees as a disconnect between Nigeria’s tax laws and their actual enforcement. “We’ve always had the laws,” he said, “but compliance is often compromised, and enforcement is inconsistent.”

He added that with oil revenues no longer reliable, Nigeria must strengthen its tax base to fund essential services. “Even wealthy nations lean on taxes to finance development. We can’t keep relying on oil.”

Alonge also acknowledged that the reforms may blur income boundaries, especially for those with side hustles or informal earnings. “Someone earning N200,000 monthly might not consider themselves middle-income, but if you factor in additional earnings, their tax status could change quickly,” he explained. “That’s why implementation needs to be approached carefully.”

On a separate note, Alonge addressed public concerns about fraudulent actors in the real estate sector. “Let me be clear—within our profession, we don’t have unqualified practitioners. The problem lies in the broader industry where people pose as professionals,” he stated.

He blamed widespread property fraud on emotional decision-making by buyers. “People are eager to own homes. That eagerness often makes them vulnerable to scams,” he said.

Alonge urged property seekers to consult registered professionals before engaging in transactions. “Due diligence is everything. Engaging certified experts can save people from painful losses,” he advised.

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In a significant move to address the impact of Nigeria’s ongoing tax reforms on the building and construction sector, the Council of Registered Builders of Nigeria (CORBON) has formalized partnership with the pioneer and leading civil society organization promoting affordable housing in Africa, the Housing Development Advocacy Network (HDAN), owners of Housing TV Africa, to co-host a high-level forum to discuss the implications of the new tax reform on the building and construction industry.

The event, scheduled for Thursday, April 24, 2025 at the Ladi Kwali Hall, Abuja Continental Hotel, aims to shed light on recent changes in tax regulations, explore emerging market opportunities, and tackle the challenges faced by stakeholders in implementing the new tax law.

In a press release, HDAN’s Executive Director, Festus Adebayo, stated that the collaboration with CORBON could not have come at a better time.

“We cannot fold our arms and allow the new tax reform to be passed into law without explaining its implications on the building and construction industry, and that is what we are planning to do in collaboration with CORBON, whose new leadership has prioritized advocacy for the development of the sector,” the statement reads.

Adebayo also emphasized that outcomes from this forum would be vital for its lobbying activities, particularly as it intends to engage with the new Tax Reform Committee at the National Assembly.

“The resolutions from this forum will be of great interest to our lobby group, as we aim to ensure that relevant concerns are addressed,” Adebayo noted.

He further confirmed that Mr. Taiwo Oyedele who is the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms has confirmed to be the Keynote Speaker, and the Minister for Housing and Urban Development, Arc. Ahmed Dangiwa will be there as a Special Guest of Honour, while the Chairman of CORBON, Bldr. Samson Opaluwah, will be the Chief Host.

Recognized for his expertise in fiscal policy, Mr. Oyedele’s involvement underscores the forum’s significance for shaping tax-related decisions that affect the construction and real estate sectors. Both CORBON and HDAN are also collaborating to identify and invite a diverse panel of experts who will enrich the discussions.

The goal is to bring together professionals from taxation, construction, real estate, finance, and policy to ensure a well-rounded exploration of issues and solutions.

The partnership between CORBON and HDAN comes at a crucial time, as Nigeria’s construction sector continues to expand and evolve under new tax regimes. The forum will delve into tax compliance and incentives, policy gaps and opportunities, and collaborative advocacy, with the aim of uniting professional bodies, civil society groups, and government representatives to create a balanced approach that benefits both the public and private sectors.

By pooling resources and expertise, CORBON and HDAN hope to influence policy formulation and implementation in ways that bolster Nigeria’s housing and construction ecosystem.

According to HDAN, “This collaboration is not just about organizing an event, it’s about driving meaningful change and ensuring that voices from the grassroots, professional bodies, and policymakers are heard in the ongoing discussions around tax reforms.”

Participation will be by registration, not just for everybody but to also accommodate all senior professionals, experts and leaders in the sector.

The Council of Registered Builders of Nigeria (CORBON) is the statutory regulatory body for the practice of building in Nigeria. It is committed to advancing professional standards, promoting best practices, and influencing policies that support a robust and sustainable construction sector. Since the new leadership, council and registrar, it has been a different ball game with a more proactive approach.

The Housing Development Advocacy Network (HDAN) is a leading civil society organization and the owners of Africa International Housing Show and Housing TV Africa, dedicated to championing affordable housing, transparent policies, and sustainable growth in Nigeria’s real estate and construction industries. Its membership includes professionals that cut across different areas and professional bodies. Through research, advocacy, and strategic partnerships, HDAN seeks to influence policy reforms and promote equitable development.

The post New Tax Reforms: CORBON, HDAN Partner to Explore Implications on Housing Sector appeared first on Housing TV Africa.

It is a strategic investment in better infrastructure, improved public services, and a prosperous future for all Kogi residents.

Speaking at the unveiling of the Land Use Charge Law, 2024, at the KGIRS Board Room, Enehe described the initiative as a crucial step toward strengthening the state’s revenue base for sustainable development.

He noted that ongoing tax reforms aim to simplify revenue collection, enhance transparency, and ensure that every stakeholder contributes fairly to the state’s growth.

According to him, the Land Use Charge will generate funds for local government projects, improve data-driven decision-making, and foster smart city development. It will also create employment opportunities. He urged property owners and residents to support the initiative, stressing that a well-structured revenue system is the foundation of good governance.

By complying with the charge, citizens will directly contribute to the government’s ability to deliver impactful projects that benefit businesses, communities, and future generations.

Enehe reassured stakeholders of the government’s commitment to accountability, transparency, and efficiency in revenue administration. With the launch of the Land Use Charge Demand Notice, the state is reinforcing its dedication to responsible financial management and long-term development.

He called on residents to exercise patience and cooperate as the implementation unfolds. The government will provide practical demonstrations of how property assessments will be conducted. He expressed confidence that through collective effort and compliance, Kogi State can unlock its economic potential and build a brighter future for all its citizens.

The post Kogi Residents Urged to See Land Use Charge as an Investment in the State appeared first on Housing TV Africa.

In a significant move to address the impact of Nigeria’s ongoing tax reforms on the building and construction sector, the Council of Registered Builders of Nigeria (CORBON) has formalized partnership with the pioneer and leading civil society organization promoting affordable housing in Africa, the Housing Development Advocacy Network (HDAN), owners of Housing TV Africa, to co-host a high-level forum to discuss the implications of the new tax reform on the building and construction industry.

The event aims to shed light on recent changes in tax regulations, explore emerging market opportunities, and tackle the challenges faced by stakeholders in implementing the new tax law.

In a press release, HDAN’s Executive Director, Festus Adebayo, stated that the collaboration with CORBON could not have come at a better time.

“We cannot fold our arms and allow the new tax reform to be passed into law without explaining its implications on the building and construction industry, and that is what we are planning to do in collaboration with CORBON, whose new leadership has prioritized advocacy for the development of the sector,” the statement reads.

Adebayo also emphasized that outcomes from this forum would be vital for its lobbying activities, particularly as it intends to engage with the new Tax Reform Committee at the National Assembly.

“The resolutions from this forum will be of great interest to our lobby group, as we aim to ensure that relevant concerns are addressed,” Adebayo noted.

He further confirmed that Mr. Taiwo Oyedele who is the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms has confirmed to be the Keynote Speaker, and the Minister for Housing and Urban Development, Arc. Ahmed Dangiwa will be there as a Special Guest of Honour, while the Chairman of CORBON, Bldr. Samson Opaluwah, will be the Chief Host.

Recognized for his expertise in fiscal policy, Mr. Oyedele’s involvement underscores the forum’s significance for shaping tax-related decisions that affect the construction and real estate sectors. Both CORBON and HDAN are also collaborating to identify and invite a diverse panel of experts who will enrich the discussions.

The goal is to bring together professionals from taxation, construction, real estate, finance, and policy to ensure a well-rounded exploration of issues and solutions.

The partnership between CORBON and HDAN comes at a crucial time, as Nigeria’s construction sector continues to expand and evolve under new tax regimes. The forum will delve into tax compliance and incentives, policy gaps and opportunities, and collaborative advocacy, with the aim of uniting professional bodies, civil society groups, and government representatives to create a balanced approach that benefits both the public and private sectors.

By pooling resources and expertise, CORBON and HDAN hope to influence policy formulation and implementation in ways that bolster Nigeria’s housing and construction ecosystem.

According to HDAN, “This collaboration is not just about organizing an event, it’s about driving meaningful change and ensuring that voices from the grassroots, professional bodies, and policymakers are heard in the ongoing discussions around tax reforms.”

The event will be held on Thursday, April 24, 2025 at the Ladi Kwali Hall, Abuja Continental Hotel, Abuja. Participation will be by registration, not just for everybody but to also accommodate all senior professionals, experts and leaders in the sector.

The Council of Registered Builders of Nigeria (CORBON) is the statutory regulatory body for the practice of building in Nigeria. It is committed to advancing professional standards, promoting best practices, and influencing policies that support a robust and sustainable construction sector. Since the new leadership, council and registrar, it has been a different ball game with a more proactive approach.

The Housing Development Advocacy Network (HDAN) is a leading civil society organization and the owners of Africa International Housing Show and Housing TV Africa, dedicated to championing affordable housing, transparent policies, and sustainable growth in Nigeria’s real estate and construction industries. Its membership includes professionals that cut across different areas and professional bodies. Through research, advocacy, and strategic partnerships, HDAN seeks to influence policy reforms and promote equitable development.

The post CORBON, HDAN Partner for High-Level Forum on Nigeria’s New Tax Reforms appeared first on Housing TV Africa.

For those querying the rationale behind the rush to pass the tax reform bill, I say look no further—the World Bank loans approved in June 2024 are to blame. Some may recall that the World Bank announced in June 2024 that two loans worth 2.25 billion US dollars had been approved for Nigeria under two new programmes. These loans were approved based on the agreement that Nigeria will increase VAT rate to “at least” 12.5 per cent by 2026.

These programmes will have negative implications for the country, leading to inflation. It is surprising that a government struggling with a 34 per cent inflation rate would agree to these terms. But before we discuss the consequences, let’s discuss some details of the loan, including the actions to be taken.

The first, ‘Accelerating Resource Mobilisation Reforms’ (AMOR), is worth 750 million US dollars. It is a programme for results with disbursed linked indicators. To my knowledge, no detailed information on the World Bank website shows any disbursement or financial agreement for the AMOR programme.

The second loan, 1.5 billion US dollars, is under the ‘Reforms for Economic Stabilisation to Enable Transformation’ (RESET) programme. Under this programme, two World Bank agencies—the International Development Association (IDA) and the International Bank for Reconstruction and Development (IBRD)—share the financing of 750 million US dollars each.

• According to the World Bank’s website, the RESET loan of 1.5 billion US dollars is active. IDA disbursed all 750 million USD of the RESET loan on June 28, 2024. IBRD claimed its front-end fee—a payment made at the beginning of a financial arrangement—of 1.875 million US dollars on June 26, 2024. These transactions happened without the Senate announcing approval unless they were done in secrecy.

The costs of these loans are also different. Nigeria will pay an 8.33 per cent interest rate on half of the loan under IDA, which will commence between 2030 and 2036. For the other half, with IBRD, the payment will begin in 2035 and end in 2048 at 3.85 per cent.

These 8.33 per cent and 3.85 per cent interest rates are too high for a World Bank loan to a low-middle-income country like Nigeria. The loans reflect non-concessional terms stipulated under the Fiscal Responsibility Act of 2007. Concessional loans from the IDA typically have 0% interest, a 40-year repayment period, and a 10-year grace period to ease the financial burden. Ironically, these rates contradict the fiscal laws outlined in the Fiscal Responsibility Act. This also contrasts with the World Bank’s principle of providing affordable financing for development.

In all seriousness, this is not a rate designed to help a country seeking to build a fiscal space. But my sympathies or suspicions lie with the administrators of this Tinubu-led government who sought this loan. But that’s not it.

The worrying part comes under the actions to be taken under the programme. They are divided into two pillars. Pillar 1 is about building fiscal space, and Pillar 2 is about protecting the poor and economically insecure. I wrote about these in one of my previous columns in June, titled “Counterproductive World Bank Loan: Reasons to Reject.” The expenditure mainly duplicated existing projects because Nigeria has digitised its tax collection since 2015. We have the Integrated Tax Administration System (ITAS), e-filing Platforms, Tax Identification Number (TIN) System, Remita, Treasury Single Account (TSA), Payroll Management, e-payment Channels, Automated VAT Collection, and Electronic Tax Clearance Certificates, among a few others.

The fiscal trap is under item 2 of Pillar 1. The agreement reads, “To increase non-oil revenues and reform the VAT regime, the Borrower has submitted to the National Assembly a draft bill to progressively increase the VAT rate to at least 12.5 per cent by 2026 and allow input tax credits for capital and services.” This agreement is what is pushing the government to get the Tax Reform Bill passed.

As we are already in December, this agreement means the government will increase VAT rates by two-thirds within 12 months. Recall that the FIRS Chairman has proposed an increase of 33.3 per cent  in 2025, from 7.5 to 10 per cent, some few days from now. They will then raise the VAT rates by “at least” another one-third to 12.5 per cent in 2026, which will have to be announced in December 2025. There will be consequences.

The VAT system in Nigeria covers all finished goods and services, with a few exemptions that hardly impact the average person. Given the present hardship, with the inflation rate touching 34 per cent, people will see a direct spike in the prices of all VAT-able items—the vast majority of consumer goods.

The scary part is that this will not be like the inflationary trends after the removal of fuel subsidy in June 2023, where the burden will be shared between many products. This impact will be directly felt on every product as soon as the announcement is made. Let us also not ignore that once people expect prices to rise, they will increase regardless of what the government does.

The immediate consequence is a reduction in total consumption. When people buy less, producers will be affected because their goods and services are not selling. This will press them to reduce the cost of production, including workers, which means higher unemployment in the country.

These expensive World Bank loans will only increase economic instability in an already volatile economy because the repayment period is in 2030. Nigeria will still be working through the VAT increase shocks. As many policymakers and experts have advised, the government should postpone approving this tax reform and consult much further.

The post Costly World Bank loans behind tax reforms rush appeared first on Housing TV Africa.

The IMF’s analysis underscores the sheer scale of the challenge that emerging markets and developing countries face. To meet global development goals by 2030, governments worldwide must raise an additional $3 trillion. For emerging economies, this represents approximately 4% of their GDP, while for low-income countries, the figure soars to a staggering 16%. These figures point to a substantial funding gap that traditional revenue sources alone cannot bridge. This is where property taxes could play a transformative role.

Currently, property taxes contribute minimally to GDP in many low-income regions. African and Asian nations typically collect only about 0.1% of their GDP from property taxes, a stark contrast to the over 1% seen in OECD countries and nearly 3% achieved by some advanced economies. This discrepancy, according to the IMF, indicates significant untapped potential in regions like Nigeria, where revenue systems face both structural and implementation challenges.

The IMF’s report highlights that property taxes offer several advantages over other forms of taxation. One of the most compelling benefits is that they are inherently local in nature. Unlike broad-based national taxes that often trigger political and social resistance, property taxes are collected and spent at the local level, which can mitigate opposition and foster greater public acceptance. By creating a direct link between tax revenue and community services, property taxes enhance local accountability, showing taxpayers tangible benefits from their contributions.

The IMF also emphasized that property taxes are particularly suited for rapidly urbanizing nations where construction and real estate development are significant drivers of wealth. By effectively taxing this sector, local governments can capture the economic gains generated through urban expansion. This revenue can then be reinvested into public goods such as roads, schools, and health services, creating a virtuous cycle of growth and development.

However, the path to implementing these reforms is not without obstacles. The IMF acknowledged the political challenges inherent in introducing new or higher taxes. Recent global examples demonstrate that tax hikes can lead to social unrest, making strategic communication and phased approaches critical. Property taxes, however, have an edge in this regard. When transparently managed and clearly linked to local benefits, they may face less resistance compared to more generalized national taxes.

To maximize the potential of property tax reforms, the IMF advocates for the integration of modern technology. Using tools such as satellite imagery, drones, and geographic information systems (GIS), local governments can map and assess property values more accurately, expanding tax coverage and enhancing efficiency. This strategy has proven effective in cities like Delhi and Bangalore, where such technologies have allowed for more precise property tracking and valuation.

For Nigeria, the IMF suggests a practical, phased approach to reform. Initially, municipalities could start with an area-based property tax system, which, although simpler, provides a foundation for gradual enhancement. As local technological and valuation capabilities improve, these municipalities could transition to a full value-based system, reflecting true property market values. This approach balances the need for immediate action with the complexities of overhauling tax systems.

The IMF’s analysis reinforces that property tax reforms are more than just a tool for raising revenue—they are a pathway to sustainable economic stability. By allowing local governments to generate their own resources, property taxes reduce dependency on unpredictable national or external funding sources, providing a stable fiscal environment conducive to long-term planning and investment.

The IMF concluded that while implementing these changes comes with challenges, they are surmountable with the right strategies. Clear communication with the public about the benefits and purpose of these taxes, alongside the use of modern technology, can make property tax systems more effective and politically viable. For Nigeria, embracing such reforms could mean better public services, enhanced economic stability, and the fostering of inclusive growth, positioning the country on a stronger fiscal footing for years to come.

The post IMF Urges Nigeria to Tap Into Property Taxes for Sustainable Economic Growth appeared first on Housing TV Africa.

Leading the dialogue on the issue, Festus Adebayo, Executive Director of the Housing Development Advocacy Network (HDAN), hosted a Zoom conference which was aired live on Housing TV Africa, titled Nigeria’s New Tax Reforms: What Effect on the Real Estate Sector? where Dr. Abiodun Adedipe, Founder and Chief Consultant of B. Adedipe Associates Limited (BAA Consult), presented a comprehensive analysis of the new reforms and how they may impact housing development and investment.

“The current administration’s move to consolidate tax provisions and address multiple taxation issues could greatly benefit the real estate sector,” Dr. Adedipe noted. He explained that Nigeria’s long-standing issue with redundant taxes has limited growth in real estate, especially for smaller developers. “For decades, multiplicity of taxes has stifled growth in real estate, particularly for small and mid-sized developers,” he said. The reforms aim to harmonize taxes at every governmental level, potentially reducing administrative burdens that have long posed challenges for real estate players.

According to him, President Tinubu’s administration introduced these reforms as part of four legislative bills: the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service Establishment Bill, and the Joint Revenue Board Establishment Bill. Dr. Adedipe explained that the goal of this package is to streamline Nigeria’s tax landscape to make compliance easier for businesses.

“The reform has great potential, especially if executed efficiently,” he stated. “Developers facing hefty upfront taxes will now find some relief, allowing more resources to flow into actual property development.” He stressed that these changes could redirect funds towards growth in the sector rather than being absorbed by layered tax obligations.

One aspect of the reform includes exempting essential goods and services from VAT, which could lower costs on construction materials and transportation, directly benefiting the housing sector. “Any reduction in the cost of materials, particularly in a high-inflation environment, could alleviate some financial pressures on developers and make housing projects more viable,” Dr. Adedipe explained.

However, some provisions have generated controversy among stakeholders. Northern governors and the Nigeria Economic Council have expressed concerns over the proposed VAT increase, intended to compensate for revenue reductions resulting from tax streamlining.

The reforms also implement a progressive tax rate structure, placing greater fiscal responsibility on wealthier citizens and larger corporations, a move aligned with global practices. Dr. Adedipe pointed out that this shift could drive more local investment in real estate by lowering the tax burden on smaller developers. “The progressive tax rates now place a heavier burden on higher-income individuals while sparing those at the bottom,” he noted. “This differentiation aligns with global tax systems and could encourage more local investment in housing.”

On his part, Adebayo emphasized during the conference that the lack of targeted provisions for affordable housing has sparked concerns within the real estate sector. Advocates have long called for tax reliefs on materials used in affordable housing construction, an area in which the reforms fall short. “For years, affordable housing advocates have sought tax breaks and exemptions for materials used in low-cost housing,” he said.

Dr. Adedipe acknowledged this gap and encouraged continued advocacy. “We should not overlook the economic role of real estate. As stakeholders, we must continue the conversation, urging policymakers to consider the unique needs of the sector,” he urged.

Conference participants including, Hakeem Ogunniran, the Founder and CEO of Eximia Realty Company Ltd. raised questions about the reforms’ likely impact on property prices, rent levels, and the tax treatment of real estate investment trusts (REITs). Ogunniran added that under the new tax reform, “Any distribution made under a REIT or REICO is exempted from deductions at source pursuant to Section 80 of CITA”. That’s a major breakthrough provision – completing the cycle of those asset classes as “transparent, flow through entities. That should enhance the growth of REITs and facilitate capital raising by real estate developers” he said.

Dr. Adedipe underscored the importance of ongoing advocacy during this critical legislative period, saying, “We have space to intervene and raise all these issues before these bills are signed into law.” In response, Adebayo said HDAN is ready to work closely with the National Assembly to secure provisions that would specifically benefit affordable housing and real estate investment.

Meanwhile, Dr. Adedipe also addressed Nigeria’s broader economic challenges, including high inflation, and noted that the reforms aim to foster a healthier tax culture and enhance revenue stability. He highlighted exemptions for small and micro-businesses, along with reduced rates for low-margin sectors, as measures intended to ease the burden on those most affected by economic pressures. “The reforms have taken into account that life is tough for both ordinary Nigerians and businesses, especially in real estate, where financing and costs are particularly challenging,” he said.

The discussions highlighted that real estate stakeholders still have time to advocate for specific adjustments to the reforms. Adebayo and Dr. Adedipe agreed that further concessions, particularly for affordable housing, would be essential to ensure that the reforms foster sustainable growth across all real estate segments.

The post How President Bola Tinubu’s New Tax Reforms will affect Real Estate Sector appeared first on Housing TV Africa.