The Federal Government has dismissed claims that the Nigeria Tax Act 2025 imposes a 25% levy on building materials or bank balances, outlining incentives for housing and businesses
The Federal Government has refuted claims that the Nigeria Tax Act 2025 imposes a 25 per cent levy on building materials, construction funds or bank balances.
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Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made the clarification in a statement issued on Sunday via X in response to a viral video of former Minister of Transportation, Rotimi Amaechi.
Amaechi had warned during a public gathering that the tax law would automatically deduct 25 per cent from payments for building materials and increase economic hardship if the All Progressives Congress retains power in 2027.
However, Oyedele described the claims as false and misleading.
“We are aware of a recent video claiming that the new tax laws will commence in 2027 and alleging the imposition of a 25% tax on funds for building materials and other transactions. Both claims are incorrect,” he said.
He stressed that the Nigeria Tax Act 2025 has already commenced and does not impose any 25 per cent tax on construction funds, business expenses or bank balances.
Housing and Real Estate Reliefs
Oyedele outlined several provisions aimed at lowering housing costs and encouraging real estate development.
According to him, land and buildings are exempt from Value Added Tax under Section 185(l), while contractors can recover input VAT on materials and overhead costs where applicable.
A reduced Withholding Tax rate of two per cent now applies to construction contracts.
He added that mortgage interest is tax-deductible for individuals building owner-occupied residential homes, while property owners earning rental income can deduct expenses such as repairs, insurance and agency fees.
Tenants can claim rent relief of up to ₦500,000 — representing 20 per cent of annual rent — and rent remains exempt from VAT. Lease agreements valued below ₦10 million annually, or 10 times the minimum wage, are exempt from stamp duty.
Investor and Business Incentives
Oyedele also highlighted incentives for investors and developers, including:
Capital Gains Tax exemption on the disposal of a dwelling house by individuals.
Tax exemptions for Real Estate Investment Trusts that distribute at least 75 per cent of income within 12 months.
Up to 10 years of tax incentives for manufacturers of building materials such as iron and steel under priority sector schemes.
Scope for reducing Companies Income Tax for large firms from 30 per cent to 25 per cent.
Zero per cent Companies Income Tax and VAT exemptions for small companies.
“The Act does not tax money in bank accounts. It does not tax transfers for buying building materials. It does not introduce a 25% construction or business cost tax. It does not delay implementation until 2027,” Oyedele stated.
Dismissing the viral claims, he urged Nigerians to verify alarming assertions by consulting the law directly.
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“With the new tax laws, housing should become more affordable, and rent should go down, NOT up,” he added.
