The Presidential Fiscal Policy and Tax Reforms Committee has dismissed as false a viral video alleging that new tax laws will introduce a 25 per cent levy on funds earmarked for building materials and other financial transactions beginning in 2027.
In a statement issued on Sunday and made available to journalists, the committee clarified that the Nigeria Tax Act 2025 has already taken effect and contains no provision imposing a 25 per cent tax on construction funds, bank balances, or routine business expenses.
According to the committee, the Act instead provides targeted fiscal measures designed to reduce housing costs, stimulate real estate development, and support small businesses and low-income renters.
Among its key provisions is a Value Added Tax (VAT) exemption on land, buildings, and rent. Contractors are also entitled to claim input VAT credits, a measure aimed at lowering overall construction costs and easing project financing pressures.
The committee further disclosed that a reduced two per cent Withholding Tax rate now applies to construction contracts, a move expected to improve developers’ cash flow and reduce financing burdens.
Tenants are also set to benefit under the Act. Renters can claim relief of up to ₦500,000, representing 20 per cent of annual rent, while lease agreements valued below ₦10 million annually are exempt from stamp duty. Property owners are permitted to deduct allowable expenses, including repairs and insurance, from rental income before tax assessment.
In addition, investors are offered incentives such as exemption from Capital Gains Tax on the disposal of dwelling houses. Real Estate Investment Trusts (REITs) that distribute at least 75 per cent of their income annually also qualify for tax incentives.
Manufacturers in the building materials value chain stand to gain as well. The production of iron, steel, domestic appliances, and other construction-related materials qualifies for specific tax exemptions under the economic development incentive scheme for up to 10 years.
Small companies are not left out. The committee confirmed that qualifying small businesses benefit from zero per cent Companies Income Tax, exemption from charging VAT, and relief from Withholding Tax deductions.
Describing the reforms as evidence-based and growth-driven, the committee stressed that the new tax framework is structured to make housing more affordable and boost disposable income, not to raise rents or impose additional financial burdens on Nigerians.
It urged citizens to verify claims against the actual provisions of the law rather than rely on unsubstantiated social media narratives designed to generate fear.
The clarification follows the assent granted in June 2025 by President Bola Tinubu to four major tax reform bills passed by the National Assembly: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.
The Presidency had stated at the time that the reforms would modernise tax administration, enhance revenue generation, improve the business climate, and stimulate both domestic and foreign investment.
With the Nigeria Tax Act 2025 now operational, the committee maintains that its provisions are structured to support economic growth, incentivise housing development, and strengthen investor confidence; contrary to claims circulating online.