By Ayomide Otitoju
The Presidential Fiscal Policy and Tax Reforms Committee has dismissed as false a viral video claiming that new tax laws would take effect in 2027 and impose a 25 per cent tax on funds for building materials and other transactions.
committee clarified that the Nigeria Tax Act 2025 has already commenced and contains no provision imposing such a tax on construction funds, bank balances, or business expenses.
The committee said the Act instead introduces measures to reduce housing costs, encourage real estate development, and support small businesses and low-income renters. Key provisions include:
Value Added Tax (VAT) exemption on land, buildings, and rent, along with input VAT credits for contractors to lower construction costs.
A reduced two per cent Withholding Tax rate on construction contracts to ease cash flow and financing pressure for developers.
Rent relief of up to ₦500,000, representing 20 per cent of annual rent, while lease agreements below ₦10 million annually are exempt from stamp duty. Property owners can deduct expenses such as repairs and insurance from rental income.
Incentives for investors, including Capital Gains Tax exemption on disposal of dwelling houses and tax benefits for Real Estate Investment Trusts distributing at least 75 per cent of income annually.
Tax exemptions for manufacturing building materials such as iron, steel, and domestic appliances under an economic development incentive scheme for up to 10 years.
Benefits for small companies, including zero per cent company income tax, VAT exemptions, and relief from Withholding Tax deductions.
The committee urged Nigerians to rely on verified provisions of the law rather than misinformation designed to create fear and panic. “Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law. The new tax framework was designed to make housing more affordable, promote real estate development, incentivise manufacturing, and grant rent relief,” it said.
The reforms follow the assent by President Bola Tinubu in June 2025 to four tax reform bills passed by the National Assembly: the Nigeria Tax Bill, Nigeria Tax Administration Bill, Nigeria Revenue Service (Establishment) Bill, and Joint Revenue Board (Establishment) Bill.
The presidency said the new laws are expected to transform tax administration, increase revenue generation, improve the business environment, and boost both domestic and foreign investment.
