Contrary to some false insinuations, the new tax Act does not impose 25 % tax on building materials or funds , the chairman Presidential tax reform committee, Taiwo Oyedele clarified in his X handle on Sunday.
Puncturing the claim, he reaffirmed the “๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐ฑ ๐๐๐ญ 2025 ๐ก๐๐ฌ ๐๐จ๐ฆ๐ฆ๐๐ง๐๐๐ ๐๐ง๐ ๐๐จ๐๐ฌ ๐๐๐ ๐๐ฆ๐ฉ๐จ๐ฌ๐ ๐ 25% ๐๐๐ฑ ๐จ๐ง ๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐๐๐ญ๐๐ซ๐ข๐๐ฅ๐ฌ ๐จ๐ซ ๐ ๐ฎ๐ง๐๐ฌ
Making reference to a recent video, Oyedele said:” We are aware of a recent video claiming that the new tax laws will commence in 2027 and alleging the imposition of a 25% tax on funds for building materials and other transactions.
“Both claims are incorrect. Contrary to the misinformation seeking to create fear, panic and disaffection, the Nigeria Tax Act 2025 has already commenced and does not impose a 25% tax on construction funds, bank balances, or business expenses. Instead, it contains provisions specifically designed to reduce the cost of housing, rent and real estate development”
He cited relevant provisions to make housing more affordable, encourage real estate development, and support small business property contractors and low-income renters include: ๐ณ๐๐๐๐ c๐๐๐ ๐๐ v๐๐๐๐ ๐๐๐ ๐๐๐ p๐๐๐๐๐๐๐ d๐๐๐๐๐๐๐๐๐๐. ๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ข๐ฏ๐ฅ ๐ข๐ฏ๐ฅ ๐๐ถ๐ช๐ญ๐ฅ๐ช๐ฏ๐จ๐ด (๐.185(๐ญ)): Land and buildings are now specifically exempt from Value Added Tax (VAT).
๐๐ฏ๐ฑ๐ถ๐ต ๐๐๐ ๐๐ณ๐ฆ๐ฅ๐ช๐ต๐ด ๐ง๐ฐ๐ณ ๐๐ฐ๐ฏ๐ต๐ณ๐ข๐ค๐ต๐ฐ๐ณ๐ด: Where VAT is chargeable on any materials or service, contractors can now recover VAT on their assets and overhead costs, which lowers overall construction costs.
๐๐ฆ๐ฅ๐ถ๐ค๐ฆ๐ฅ ๐๐ช๐ต๐ฉ๐ฉ๐ฐ๐ญ๐ฅ๐ช๐ฏ๐จ ๐๐ข๐น (๐๐๐): A lower 2% WHT rate is applicable on construction contracts, helping to conserve cash flow and reduce financing pressure on developers.
๐๐ฐ๐ข๐ฏ ๐๐ฏ๐ต๐ฆ๐ณ๐ฆ๐ด๐ต ๐๐ฆ๐ฅ๐ถ๐ค๐ต๐ช๐ฐ๐ฏ (๐.30(2)(๐ช๐ท)): Mortgage interest is tax-deductible for individuals developing an owner-occupied residential house.
๐๐ฆ๐ฅ๐ถ๐ค๐ต๐ช๐ฃ๐ญ๐ฆ ๐๐ฆ๐ฏ๐ต๐ข๐ญ ๐๐น๐ฑ๐ฆ๐ฏ๐ด๐ฆ๐ด (๐.20): Property owners who earn rental income can deduct related costs such as repairs, insurance, and agency fees.
He cites provisions that offers d๐๐๐๐๐ re๐๐๐๐ ๐๐๐ e๐๐๐๐๐๐ ๐๐๐
t๐๐๐๐๐๐ noting
“๐๐ฆ๐ฏ๐ต ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.30(2)(๐ท๐ช)): Individuals can claim relief up to โฆ500,000 (20% of annual rent), increasing disposable income for low-income earners.
“๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ฆ๐ฏ๐ต (๐.185(๐ญ)): The VAT exemption on land and buildings also covers rent which is fully exempt from Value Added Tax. ๐๐ต๐ข๐ฎ๐ฑ ๐๐ถ๐ต๐บ ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.134): Lease agreements with an annual value below โฆ10,000,000 (or 10 times the annual minimum wage) are exempt from stamp duty.
“Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law. Rather, the new tax law specifically introduced measures to make housing more affordable, promote real estate development, incentivise manufacturing of building materials, and grant rent reliefs to tenants to enhance their disposable income” , he concluded.
