The Presidential Fiscal Policy and Tax Reforms Committee has strongly refuted misleading claims in a viral video alleging that Nigeria’s new tax laws, supposedly taking effect in 2027, will impose a 25% levy on funds allocated for building materials, construction transactions, bank balances, or related business expenses.
In an official statement issued on Sunday, February 15, 2026, the committee made it clear that the Nigeria Tax Act 2025 is already in operation and includes no provision whatsoever for a 25% tax on construction funds, bank accounts, or business costs. The circulating claims are false and appear intentionally crafted to generate fear and confusion among the public.
Far from imposing new burdens or driving up rents, the Act is deliberately designed to:
– Make housing more affordable for Nigerians
– Stimulate real estate development
– Support small businesses
– Increase disposable income, especially for low-income renters
Major Relief Measures in the Nigeria Tax Act 2025
– VAT Exemptions — Complete exemption from Value Added Tax on land, buildings, and rental payments; contractors also receive input VAT credits to significantly cut construction expenses.
– Reduced Withholding Tax — A lowered rate of 2% applies to construction contracts, improving cash flow and reducing financing pressure on developers.
– Rent Relief for Tenants — Eligible individuals can claim tax relief of up to ₦500,000 (equivalent to 20% of annual rent), directly increasing take-home income.
– Stamp Duty Exemption — Lease agreements valued below ₦10 million per year are exempt from stamp duty.
– Deductions for Landlords — Property owners can deduct legitimate expenses such as repairs and insurance from rental income.
– Investor Incentives — Exemption from Capital Gains Tax on the sale of dwelling houses; favourable treatment for Real Estate Investment Trusts (REITs) that distribute at least 75% of income annually.
– Manufacturing Support — Producers of key building materials (e.g., iron, steel, domestic appliances) qualify for tax exemptions of up to 10 years under the economic development incentive scheme.
– Small Business Benefits — Qualifying small companies enjoy zero percent Companies Income Tax in specified cases, exemption from charging VAT, and relief from Withholding Tax deductions.
The committee stressed that these reforms are evidence-based and aimed at lowering housing and rental costs — not increasing them. It called on Nigerians to disregard unverified social media rumours and instead refer directly to the actual provisions of the law.
President Bola Tinubu signed the four major tax reform bills into law in June 2025 following wide-ranging consultations with stakeholders. The legislation is expected to modernise tax administration, boost government revenue, improve the ease of doing business, and attract greater domestic and foreign investment.
The committee’s final message was clear:
“Fact, not fear—evidence beats emotion. Whenever you hear alarming claims about new taxes, simply ask: ‘Where exactly is it written in the law?’ With these reforms, housing and rent should become more affordable, and rents should go down, not up!”
