The Presidential Fiscal Policy and Tax Reforms Committee has clarified that the new tax laws in Nigeria do not impose a 25 per cent tax on funds for building materials, bank balances, or business transactions, contrary to a viral video circulating online.
In a statement released to Channels Television, the committee emphasized that the Nigeria Tax Act 2025, which has already commenced, contains no such provisions. Instead, the law introduces measures to reduce housing costs, encourage real estate development, and support small businesses and low-income renters.
Key Provisions of the Nigeria Tax Act 2025
- Value Added Tax (VAT) exemptions on land, buildings, and rent.
- Input VAT credits for contractors to lower construction costs.
- Two per cent Withholding Tax on construction contracts to ease cash flow for developers.
- Rent relief: Up to ₦500,000 (20% of annual rent) for tenants.
- Stamp duty exemption on leases below ₦10 million annually.
- Deductible expenses for property owners, including repairs and insurance.
- Capital Gains Tax exemption on disposal of dwelling houses.
- Tax incentives for Real Estate Investment Trusts (REITs) distributing at least 75% of income annually.
- Incentives for manufacturers of building materials like iron, steel, and domestic appliances, including up to 10 years’ exemption under the economic development incentive scheme.
- Support for small businesses: zero per cent companies income tax, VAT exemptions, and relief from Withholding Tax deductions.
Committee’s Advisory
The committee urged Nigerians to rely on verified provisions of the law and avoid misinformation intended to create fear. They emphasized that the reforms aim to make housing more affordable, increase disposable income, and promote real estate development, rather than impose additional taxes on citizens.
President Bola Tinubu assented to four tax reform bills in June 2025:
- Nigeria Tax Bill
- Nigeria Tax Administration Bill
- Nigeria Revenue Service (Establishment) Bill
- Joint Revenue Board (Establishment) Bill
These laws are designed to transform tax administration, improve the business environment, boost revenue generation, and attract both domestic and foreign investments.
If you want, I can also make a simple infographic-style summary of the main benefits for homeowners, developers, and small businesses under the new tax laws. Do you want me to do that?
