Our Reporter, Abuja
The Presidency has countered claims attributed to former Minister of Transportation, Rotimi Amaechi, over the implementation of the Nigeria Tax Act 2025, insisting that the law has already commenced and does not impose a 25 per cent tax on building materials or construction funds.
In a clarification issued by the Presidential Fiscal Policy and Tax Reforms Committee, the Presidency dismissed as false a viral claim that the new tax regime would only take effect in 2027 and would introduce a 25 per cent levy on funds used for building materials and other transactions.
Describing the assertions as misinformation capable of creating fear and disaffection, the committee stated that the Act neither delays implementation until 2027 nor introduces any new tax on bank balances, construction funds or business expenses.
According to the Presidency, the law instead contains provisions specifically designed to reduce the cost of housing, encourage real estate development and provide relief to tenants and small businesses.
Housing and Construction Measures
The committee noted that Section 185(l) of the Act exempts land and buildings from Value Added Tax (VAT), effectively removing VAT from property transactions and rent.
It added that contractors can recover input VAT on materials, assets and overhead costs where VAT is chargeable, thereby reducing overall construction expenses. A reduced Withholding Tax rate of two per cent now applies to construction contracts to ease cash flow pressures on developers.
Under Section 30(2)(iv), mortgage interest on loans for owner-occupied residential houses is tax-deductible, while Section 20 allows property owners earning rental income to deduct expenses such as repairs, insurance and agency fees.
Relief for Renters
The Presidency also highlighted direct reliefs for tenants, stating that individuals can claim rent relief of up to ₦500,000, capped at 20 per cent of annual rent, under Section 30(2)(vi).
Rent remains fully exempt from VAT, and lease agreements valued below ₦10 million annually, or 10 times the national minimum wage, are exempt from stamp duty under Section 134.
Incentives for Investors
The Act provides that individuals are exempt from Capital Gains Tax when disposing of a dwelling house or an interest in one under Section 51(1).
Real Estate Investment Trusts that distribute at least 75 per cent of their dividend or rental income within 12 months after the financial year-end are exempt from Companies Income Tax under Section 162(c). Manufacturers of building materials such as iron and steel also qualify for tax exemptions of up to 10 years under the economic development incentive scheme.
In addition, the law provides scope for reducing the Companies Income Tax rate for large businesses from 30 per cent to 25 per cent under Section 56.
No 25% Levy, No Delay
The committee stressed that the Act does not tax money held in bank accounts, impose taxes on transfers for building materials, introduce a 25 per cent construction levy, or postpone implementation until 2027.
Urging Nigerians to verify claims against the actual provisions of the law, the committee maintained that the reforms are aimed at making housing more affordable, stimulating real estate development and increasing disposable income for renters.
