By Jeremy Fregene
The Presidency has dismissed claims by former Rivers State Governor and ex-Minister of Transportation, Rotimi Amaechi, that Nigerians would face a 25 per cent tax on payments and building materials if President Bola Tinubu is re-elected in 2027.
In a strongly worded clarification issued by the Presidential Fiscal Policy and Tax Reforms Committee and amplified by presidential spokesman Bayo Onanuga, the Federal Government described the allegation as false and misleading, insisting that the Nigeria Tax Act 2025 has already commenced and contains no such provision.
Amaechi, a former minister under ex-President Muhammadu Buhari, had alleged in a recent video that the new tax regime would only take effect in 2027 and would impose a sweeping 25 per cent tax on funds meant for building materials and other transactions. He suggested the measure would significantly increase the cost of construction and business operations if Tinubu secures a second term.
But in its response, the Presidential Fiscal Policy and Tax Reforms Committee said both claims were incorrect.
“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,” the committee stated.
It clarified that the Nigeria Tax Act 2025 is already operational and does not impose a 25 per cent tax on construction funds, bank balances or business expenses. Rather, it said, the law introduces provisions specifically designed to lower the cost of housing, rent and real estate development.
Providing a breakdown of the Act, the committee highlighted several housing-focused incentives. These include a VAT exemption on land and buildings under Section 185(l), meaning land transactions and rents are no longer subject to Value Added Tax. Contractors are also entitled to input VAT credits on materials and services, a move expected to reduce overall construction costs.
The Act further reduces Withholding Tax (WHT) on construction contracts to 2 per cent, aimed at easing cash-flow pressures on developers. Mortgage interest on owner-occupied residential houses is now tax-deductible under Section 30(2)(iv), while property owners can deduct legitimate rental expenses such as repairs, insurance and agency fees under Section 20.
For tenants, the committee noted that the law introduces direct relief measures. Individuals may claim rent relief of up to ₦500,000 or 20 per cent of annual rent, whichever is lower, thereby increasing disposable income. Lease agreements valued below ₦10 million annually are exempt from stamp duty under Section 134.
Investors and developers are also beneficiaries. The Act exempts individuals from Capital Gains Tax when disposing of a dwelling house. Real Estate Investment Trusts (REITs) are exempt from Companies Income Tax where they distribute at least 75 per cent of rental or dividend income within 12 months after the financial year-end.
In addition, manufacturing of building materials such as iron, steel and domestic appliances qualifies for tax holidays of up to 10 years under priority sector incentives. The law also provides scope for reducing the Companies Income Tax rate for large businesses from 30 per cent to 25 per cent under Section 56.
Small businesses are not left out. Qualifying small companies enjoy zero per cent Companies Income Tax, exemption from charging VAT and no deduction of Withholding Tax from invoices. The Act also caps the taxable value of employer-provided accommodation at 20 per cent of an employee’s annual gross income.
The committee stressed what it described as key misconceptions. “The Act does not tax money in bank accounts or bank balances. It does not tax transfers for buying building materials. It does not introduce a 25% construction or business cost tax. And it does not delay implementation until 2027,” the statement read.
Concluding its rebuttal, the committee urged Nigerians to rely on the text of the law rather than political rhetoric.
“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?’” it said, adding that the reforms are designed to make housing more affordable and reduce rent, not increase it.