The Presidential Fiscal Policy and Tax Reforms Committee has clarified that the Nigeria Tax Act 2025 is already effective and does not impose a 25 per cent tax on building materials, construction funds, or bank balances, dismissing circulating misinformation.

In a statement on Monday, the committee warned against claims that the law would only take effect in 2027 or introduce sweeping levies on construction-related transactions, describing both assertions as “incorrect.”

The Act, the committee noted, aims to reduce housing and real estate costs. Key provisions include:

• VAT exemptions on land and buildings.
• Recovery of VAT on contractor assets and overheads.
• Reduced 2% Withholding Tax on construction contracts.
• Tax-deductible mortgage interest for owner-occupied homes.
• Deductible expenses for landlords on rental income, including repairs and insurance.
• Direct tenant relief, with up to ₦500,000 or 20% of annual rent exempted from tax.
• Stamp duty exemption on leases below ₦10 million per year.
• Capital Gains Tax exemptions for dwelling disposals.
• REIT exemptions if at least 75% of dividends or rental income is distributed within 12 months.
• Incentives for building material manufacturers, including up to 10 years of tax relief.
• Reduced Companies Income Tax for large businesses from 30% to 25%.
• Employer-provided accommodation capped at 20% of gross income.
• 0% tax and VAT exemptions for qualifying small businesses.

The committee emphasised that the law does not:

• Tax bank account balances.
• Impose a 25% levy on construction or business expenses.
• Delay implementation until 2027.
• Tax transfers for purchasing building materials.

“It is important for Nigerians to rely on evidence rather than speculation,” the statement concluded. “With the new tax laws, housing should become more affordable, and rent should go down—not up. Fact, not fear, should guide public understanding of this law.”