“No 25% Building Tax!” – Govt Punctures Viral Claim As False, Gives Clarity

The Federal Government has dismissed as false and misleading viral claims that Nigeria’s new tax regime imposes a 25 percent levy on building materials, construction funds, or bank balances, insisting that the reforms are instead designed to make housing more affordable and stimulate real estate development.

The clarification follows widespread circulation of a video alleging that the new tax framework would only take effect in 2027 and would impose sweeping charges on money used for construction and related transactions. Officials say both claims are incorrect.

According to the Presidential Fiscal Policy and Tax Reforms Committee, the law has already commenced and contains no provisions imposing taxes on construction funds, building materials, or personal bank balances.

“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,” the committee said in an official clarification.

“Both claims are incorrect,” insiders confirm.

The committee stressed that rather than introducing new financial burdens, the reforms contain measures targeted at lowering the cost of housing and easing pressure on tenants, developers, and small contractors.

“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,” the statement said, including that “Instead, it contains provisions specifically designed to reduce the cost of housing, rent and real estate development.”

Among the measures cited are Value Added Tax exemptions on land, buildings and rent, reduced withholding tax on construction contracts, mortgage interest deductibility for owner-occupied homes, and tax reliefs for tenants.

Officials also point to incentives for investors, including capital gains tax exemptions on residential property disposal and favourable tax treatment for real estate investment vehicles that distribute income.

The committee emphasised that the reforms aim to improve affordability across the housing value chain.

“With the new tax laws, housing should become more affordable and rent should go down — not up,” it stated.

The clarification curtails growing public anxiety and commentary from growing voices, including former minister Rotimi Amaechi, as debate intensifies over the scope and impact of the reforms.

Officials insist the law does not tax money held in bank accounts, does not tax transfers used to purchase building materials, and does not introduce any general 25 percent levy on construction or business costs. They also reject claims that implementation has been deferred.

“Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law,” the committee added, urging the public to verify assertions against the text of the legislation with “Fact not fear — evidence beats emotion. If anyone makes an alarming claim or tries to misinform you, ask them: ‘Where is it in the law?’”

Authorities maintain that the broader objective of the reform is to promote investment in housing supply, reduce development costs, and expand relief for renters and low-income households — policy goals they say are incompatible with the viral narrative of punitive taxation.