The Federal Government has dismissed claims circulating in a viral video that the Nigeria Tax Act 2025 will commence in 2027 or impose a 25 per cent tax on building materials, construction funds, bank balances and other transactions.
In a statement issued on Tuesday by the Presidential Fiscal Policy and Tax Reforms Committee, the government described the claims as false, misleading and capable of creating unnecessary fear and panic among Nigerians.
“We are aware of a recent video alleging that the new tax laws will commence in 2027 and impose a 25 per cent tax on funds for building materials and other transactions. Both claims are incorrect,” the committee said.
According to the committee, the Nigeria Tax Act 2025 has already commenced and contains no provision imposing a 25 per cent tax on construction funds, bank balances or legitimate business expenses.
“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 per cent tax on construction funds, bank balances or business expenses,” the statement read.
The committee explained that rather than introducing new financial burdens, the Act includes provisions aimed at lowering the cost of housing, rent and real estate development.
“The law contains specific measures designed to reduce the cost of housing, make rent more affordable and encourage real estate development across the country,” it stated.
Among the provisions highlighted are the exemption of land, buildings and rent from Value Added Tax (VAT), reduced withholding tax of two per cent on construction contracts, and the introduction of input VAT credits for contractors to recover VAT paid on assets and overhead costs.
The statement also noted that mortgage interest for individuals developing owner-occupied residential houses is now tax-deductible, while property owners earning rental income can deduct expenses such as repairs, insurance and agency fees.
For tenants and low-income earners, the Act provides rent relief of up to ₦500,000, representing 20 per cent of annual rent, alongside stamp duty exemptions for qualifying lease agreements.
“These provisions are intended to put more money back in the hands of renters, reduce financing pressure on developers and ultimately drive down the cost of housing,” the committee said.
Addressing investors and developers, the committee pointed to incentives including capital gains tax exemptions on dwelling houses, tax reliefs for Real Estate Investment Trusts (REITs), and a reduction in companies income tax for large businesses.
The committee also emphasised protections for workers and small businesses, noting that qualifying small companies will enjoy zero per cent companies income tax, VAT exemption and relief from withholding tax deductions.
It categorically stated what the law does not do.
“The Act does not tax money in bank accounts, does not tax transfers for the purchase of building materials, does not introduce a 25 per cent construction or business cost tax, and does not delay implementation until 2027,” the statement said.
Urging Nigerians to verify claims against the actual text of the law, the committee warned against the spread of misinformation.
“Fact, not fear. Evidence beats emotion, “If anyone makes an alarming claim or tries to misinform you, ask them one simple question: where is it in the law?” the committee said.
The committee expressed confidence that with full implementation of the reforms, housing costs and rent pressures would ease rather than worsen.
“With the new tax laws, housing should become more affordable and rent should go down, not up,” the committee concluded.