Abuja, Nigeria – The Presidential Fiscal Policy and Tax Reforms Committee has dismissed claims that the Nigeria Tax Act 2025 introduces a 25 percent tax on building materials, construction funds, and related bank transactions.
Okay News reports that the clarification came in a statement issued Sunday and shared by committee chairman Taiwo Oyedele. The response followed a viral video by former Transport Minister Rotimi Amaechi alleging that the law would impose heavy charges on construction-related transactions. The committee said the Act has already commenced and contains no provision imposing a 25 percent levy on construction materials, bank balances, or business expenses linked to property development.
Officials warned that such claims are capable of creating unnecessary fear and confusion among investors, developers, and the public. In the viral video, Amaechi alleged: “The tax law is that if I pay you 100 million Naira for your building materials, automatically 25 million will leave your account. If you are a landlord and building a house, you will charge 25 percent extra because you won’t bear it alone; you will transfer it to the person who buys or rents.” The committee insisted that no such provision exists in the Act.
According to the committee, the law is structured to lower housing costs, stimulate real estate development, and provide relief to tenants and small contractors rather than increase financial burdens. The Nigeria Tax Act 2025 was designed as part of broader fiscal reforms aimed at simplifying tax administration, widening the tax base, and providing targeted reliefs to stimulate priority sectors.
The committee outlined several tax reliefs under the Act intended to reduce construction and property development costs. Land and buildings are expressly exempt from Value Added Tax, lowering acquisition and transaction costs. Contractors can recover input VAT on qualifying materials, assets, and overheads where VAT applies. Withholding Tax on construction contracts has been reduced to 2 percent to ease cash flow pressure on developers. Individuals building owner-occupied homes can deduct mortgage interest for tax purposes, while landlords can deduct repair, insurance, and agency costs before calculating taxable rental income. The law also provides direct relief to renters, including rent relief of up to N500,000 capped at 20 percent of annual rent, VAT exemption on residential rent, and stamp duty relief on qualifying lease agreements.
The clarification follows heightened political commentary ahead of the 2027 general elections, during which concerns have been raised about potential economic hardship. The Nigeria Tax Act 2025 and related reforms became effective on January 1, 2026, after being signed into law on June 26, 2025. The reforms establish a new foundation for taxation, administration, and revenue collection in Africa’s largest economy.
