Presidential Committee denies 25% building materials tax under Nigeria Tax Act

The Presidential Fiscal Policy and Tax Reforms Committee has dismissed claims that the Nigeria Tax Act 2025 introduces a 25 per cent tax on building materials, construction funds, and related bank transactions.

The clarification was issued in a statement released Sunday and shared by the committee’s chairman, Taiwo Oyedele, in response to a viral video by former Minister of Transportation, Rotimi Amaechi.

According to the committee, the Act has already commenced and contains no provision imposing a 25 per cent levy on construction materials, bank balances, or business expenses linked to property development.

The committee said the reports circulating online are false and misleading, stressing that the law is structured to lower housing costs, stimulate real estate development, and provide relief to tenants and small contractors rather than increase financial burdens.

What they are saying 

The committee directly addressed claims made in the viral video, describing them as inaccurate interpretations of the new tax framework.

• “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.” 

Officials warned that such claims are capable of creating unnecessary fear and confusion among investors, developers, and the general public.

In the viral video, Amaechi alleged that the law would impose heavy charges on construction-related transactions.

• “The tax law is that if I pay you 100 million Naira for your building materials, automatically 25 million will leave your account.” 
• “If you are a landlord and building a house, you will charge 25 per cent extra because you won’t bear it alone; you will transfer it to the person who buys or rents.” 

The committee insisted that no such provision exists in the Act.

Backstory 

The clarification follows heightened political commentary ahead of the 2027 general elections, during which concerns have been raised about potential economic hardship if the ruling party retains power. In the viral video, Amaechi warned that the new tax law would significantly raise construction costs and rents nationwide.

The committee said the Nigeria Tax Act 2025 was designed as part of a broader fiscal reform agenda aimed at simplifying tax administration, widening the tax base, and providing targeted reliefs to stimulate priority sectors, including housing and real estate.

More Insights 

According to the committee, the Act introduces several tax reliefs intended to reduce the cost of building and property development.

• Land and buildings are expressly exempt from Value Added Tax, lowering acquisition and transaction costs.
• Contractors can recover input VAT on qualifying materials, assets, and overheads where VAT applies.
• Withholding Tax on construction contracts has been reduced to 2 per cent to ease cash flow pressure on developers.
• Individuals building owner-occupied homes can deduct mortgage interest for tax purposes, while landlords can deduct repair, insurance, and agency costs before calculating taxable rental income.

The law also provides direct relief to renters and incentives for investors, including rent relief of up to N500,000 capped at 20 per cent of annual rent, VAT exemption on residential rent, and stamp duty relief on qualifying lease agreements.

What you should know 

The Nigeria Tax Act 2025 and related reforms (NTAA, NRSEA, JRBEA) became effective on January 1, 2026.

The reforms, signed into law on June 26, 2025, establish a new foundation for taxation, administration, and revenue collection in Africa’s largest economy.

Presidential Committee denies 25% building materials tax under Nigeria Tax Act  - Nairametrics