FG Debunks Viral ‘25% Building Materials Tax’ Claim

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The federal government has dismissed as false a viral video claiming that Nigeria’s new tax laws will only commence in 2027 and that a 25 per cent tax has been imposed on funds meant for building materials and other transactions.

This was contained in a separate clarification by the Presidential Fiscal Policy and Tax Reforms Committee and the Nigeria Revenue Service (NRS) on Monday.

A former Minister of Transportation, Rotimi Amaechi, had made the claim in a viral video.

In the X post by its chairman, Taiwo Oyedele, the tax committee stated, “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 institutions stressed that the claims are incorrect, noting that the Nigeria Tax Act 2025 has already commenced and does not introduce a 25 per cent tax on construction funds, bank balances, or business expenses.

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They added that the law contains targeted measures designed to reduce housing costs and stimulate real estate development, contrary to claims circulating online.

The committee specifically reiterated that 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 levy, and does not delay implementation until 2027.

Instead, it said the law provides a series of reliefs and incentives across the housing and construction value chain.

These include value-added tax (VAT) exemption on land and buildings, input VAT credits for contractors to reduce project costs, and a reduced two per cent withholding tax rate on construction contracts to ease cash flow pressures on developers.

It noted that the Act also allows mortgage interest deductions for individuals developing owner-occupied homes and permits property owners to deduct rental-related expenses such as repairs and insurance.

It stressed that renters are eligible for relief of up to ₦500,000, representing 20 per cent of their annual rent, while lease agreements with an annual rent below ₦10 million are exempt from stamp duty.

According to the committee, further incentives cover capital gains tax exemption on the disposal of dwelling houses, tax reliefs for Real Estate Investment Trusts (REITs), priority sector incentives for manufacturers of building materials such as iron and steel, and scope for a reduction in companies’ income tax for large businesses from 30 per cent to 25 per cent.

It stated that small companies also benefit from zero corporate income tax, VAT exemptions, and no withholding tax deductions on qualifying transactions.

In its separate statement, the NRS reiterated that the Act does not impose any new levy on building materials, housing funds, or construction-related transactions and corrected the claim that the law would only take effect in 2027.

“The Act does not introduce any additional tax burden or restrict how individuals finance housing projects or transfer funds for construction purposes,” the NRS stated.

Adding, the tax reform committee said, “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 relief to tenants to enhance their disposable income.”

Both bodies urged the public, developers and investors to disregard misinformation and rely on verified updates issued through official government channels, describing the Nigeria Tax Act 2025 as pro-development and aimed at strengthening housing affordability and economic growth.

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