THE Presidential Fiscal Policy and Tax Reforms Committee has dismissed as false and misleading a viral video claiming that Nigeria’s new tax laws will impose a 25 per cent levy on funds meant for building materials and other transactions from 2027.
In a statement made available to News Point Nigeria 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 routine business expenses.
According to the committee, the circulating claims are a misrepresentation of the law and appear designed to create unnecessary fear and panic among citizens.
The committee stressed that there is no section in the Nigeria Tax Act 2025 that introduces a 25 per cent tax on building materials, construction contracts, or personal bank funds.
“Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law,” the statement read.
Instead, the committee said the legislation introduces measures specifically designed to reduce housing costs, encourage real estate development, and provide relief to tenants and small businesses.
Among the key provisions of the Act is a Value Added Tax (VAT) exemption on land, buildings, and rent. Contractors are also entitled to input VAT credits, a move aimed at lowering overall construction costs.
Additionally, the law provides for a reduced two per cent Withholding Tax rate on construction contracts, helping developers conserve cash flow and reduce financing pressure.
The committee noted that renters are eligible for relief of up to ₦500,000, representing 20 per cent of annual rent. Lease agreements below ₦10 million annually are exempt from stamp duty, while property owners can deduct expenses such as repairs and insurance from rental income.
The Act further exempts the disposal of dwelling houses from Capital Gains Tax and grants tax incentives to Real Estate Investment Trusts (REITs) that distribute at least 75 per cent of their income annually.
The committee explained that manufacturers of building materials such as iron, steel, and domestic appliances qualify for tax exemptions under the economic development incentive scheme for up to 10 years.
Small companies also benefit from zero per cent Companies Income Tax, exemption from charging VAT, and relief from Withholding Tax deductions.
According to the committee, these measures are intended to stimulate domestic production, lower construction costs, and improve affordability in the housing sector.
Describing the reforms as evidence-based, the committee urged Nigerians to verify claims about the law by consulting its actual provisions.
“Fact, not fear — evidence beats emotion. If anyone makes an alarming claim or tries to misinform you, ask them, ‘Where is it in the law?’” the statement added.
The committee maintained that the new tax framework is structured to increase disposable income, make housing more affordable, and improve the business climate not to impose additional financial burdens.
“With the new tax laws, housing should become more affordable, and rent should go down, not up,” it stated.
In June 2025, President Bola Ahmed Tinubu assented to four major tax reform bills passed by the National Assembly after extensive consultations with stakeholders.
The bills include the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.
According to the presidency, the reforms are expected to transform tax administration in Nigeria by improving revenue generation, enhancing transparency, strengthening the business environment, and boosting both domestic and foreign investment.