The Presidential Fiscal Policy and Tax Reforms Committee has dismissed as false a viral video alleging that new tax laws will take effect in 2027 and impose a 25 per cent tax on funds earmarked for building materials and other transactions.
In a statement issued on Sunday, the committee clarified that the Nigeria Tax Act 2025 has already commenced and contains no provision imposing a 25 per cent tax on construction funds, bank balances, or business expenses. It described the claims circulating online as misleading and designed to create unnecessary fear and confusion among Nigerians.
According to the committee, the Act instead introduces targeted measures aimed at reducing housing costs, encouraging real estate development, and supporting small businesses as well as low-income renters. It stressed that the overall objective of the reforms is to make housing more affordable and increase disposable income, not to impose additional financial burdens.
Key provisions of the Act include a Value Added Tax exemption on land, buildings, and rent, alongside input VAT credits for contractors to help lower construction costs. The committee also noted that a reduced two per cent Withholding Tax rate now applies to construction contracts, a move intended to conserve cash flow and ease financing pressures on developers.
Renters, the committee explained, are entitled to tax relief of up to ₦500,000, representing 20 per cent of annual rent, while lease agreements below ₦10 million per year are exempt from stamp duty. Property owners are also allowed to deduct legitimate expenses such as repairs and insurance from their rental income for tax purposes.
The Act further provides incentives for investors, including exemptions from Capital Gains Tax on the disposal of dwelling houses and tax incentives for Real Estate Investment Trusts that distribute at least 75 per cent of their income annually. In addition, the manufacturing of building materials such as iron, steel, and domestic appliances qualifies for specific tax exemptions under the economic development incentive scheme for up to 10 years.
Small companies, the committee added, benefit from zero per cent Companies Income Tax, exemption from charging VAT, and relief from Withholding Tax deductions, reinforcing the law’s pro-growth and pro-small-business focus.
Urging Nigerians to rely on verified provisions of the law rather than social media misinformation, the committee emphasized that the reforms were evidence-based and designed to stimulate economic activity.
“Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law,” the statement said. “Fact, not fear—evidence beats emotion. If anyone makes an alarming claim, ask them: ‘Where is it in the law?’ With the new tax laws, housing should become more affordable, and rent should go down, not up.”
