The Presidential Fiscal Policy and Tax Reforms Committee has dismissed as false a viral video claiming that new tax laws set to take effect in 2027 would impose a 25 per cent levy on funds for building materials and other transactions.
In a statement released to The Telegraph on Sunday, the committee clarified that the Nigeria Tax Act 2025 is already in effect and contains no such provision. Instead, the law is designed to reduce housing costs, encourage real estate development, and support small businesses and low-income renters.
The Act provides VAT exemptions on land, buildings, and rent, while contractors can claim input VAT credits to lower construction costs. A reduced Withholding Tax rate of 2 per cent applies to construction contracts, easing cash flow for developers. Renters are entitled to relief of up to ₦500,000 per year, representing 20 per cent of annual rent, while leases under ₦10 million annually are exempt from stamp duty. Property owners can also deduct expenses such as repairs and insurance from rental income.
Investor incentives include exemption from Capital Gains Tax on the sale of dwelling houses and tax benefits for Real Estate Investment Trusts distributing at least 75 per cent of income annually. The manufacturing of building materials such as iron, steel, and domestic appliances qualifies for tax exemptions of up to 10 years under the economic development incentive scheme. Small businesses benefit from 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. It emphasized that the reforms aim to make housing more affordable, boost disposable income, and incentivize construction and manufacturing, not to increase rents or impose burdens on citizens.
“Claims of a 25 per cent tax on building materials or bank funds are false,” the statement said. “The law introduces measures to make housing more affordable, promote real estate development, encourage manufacturing, and provide rent relief. Fact, not fear: housing costs should go down, not up.”
