The Presidential Fiscal Policy and Tax Reforms Committee has clarified that the Nigeria Tax Act 2025 does not impose any 25 per cent tax on building materials, construction funds, bank balances or business expenses, dismissing recent claims circulating in a viral video as false and misleading.

In a statement, the committee said contrary to the misinformation, the new law introduces measures aimed at lowering housing costs, supporting real estate development and easing pressure on renters and small businesses.

It stressed that the act neither delays implementation until 2027 nor taxes money in bank accounts or transfers made to purchase building materials.

According to the committee, land and buildings are now exempt from value-added tax (VAT), while contractors can recover input VAT on assets and overheads where VAT applies, helping to reduce overall construction costs.

It also noted that withholding tax on construction contracts has been reduced to two per cent, easing developers’ cash flow even as mortgage interest on owner-occupied residential houses is now tax-deductible.

Property owners earning rental income, the committee said, can deduct expenses such as repairs, insurance and agency fees, while renters are entitled to relief of up to N500,000, representing 20 per cent of annual rent, to boost disposable income for low-income earners.

Rent is fully exempt from VAT, while lease agreements valued below N10 million yearly or 10 times the annual minimum wage attract no stamp duty.

The committee added that individuals are exempted from capital gains tax when disposing of a dwelling house, while real estate investment trusts are relieved of company income tax if they distribute at least 75 per cent of dividend or rental income within 12 months after the financial year-end.

It also highlighted incentives for manufacturers of building materials such as iron, steel and domestic appliances, alongside provisions that allow for a reduction in companies’ income tax for large businesses from 30 per cent to 25 per cent.

In the same vein, Chairman of the National Tax Policy Implementation Committee, Joseph Tegbe, said the ultimate success of Nigeria’s newly enacted tax reforms will be determined not by the ambition of the laws, but by the discipline and consistency of their execution.

Speaking at the 2026 Leadership Retreat of the Nigeria Revenue Service, Tegbe noted that Nigeria’s tax reform efforts have reached a decisive phase, where effective implementation will shape long-term fiscal stability and revenue sustainability.

He observed that Nigeria continues to record one of the lowest tax-to-GDP ratios among major economies, a situation that limits fiscal flexibility and exposes the country to volatility in global oil markets.

With public spending pressures rising, Tegbe argued that the quality of institutional performance rather than policy intent has become the key driver of fiscal resilience.

According to him, the recent passage of four new tax laws represents only the starting point of a broader reform process.

He described the reforms as a fundamental restructuring of Nigeria’s fiscal architecture, stressing that their credibility will rest on how well they are implemented.

In this context, he said the revenue service must operate as a “revenue system integrator,” where outcomes depend on policy clarity, enforcement consistency, digital systems, dispute resolution efficiency, and coordination across government tiers.

Tegbe emphasised that tax policy should function as an enabler of good governance.

He said the reform framework must prioritise simplicity, equity, predictability, and ease of administration, noting that these principles encourage voluntary compliance, reduce friction for businesses, and strengthen investor confidence.

He warned that uncoordinated policy changes or inconsistent implementation could erode trust, disrupt business planning, and weaken investment sentiment.

He also stressed that revenue reform cannot be pursued in isolation. Sustainable progress, he said, requires a whole-of-government approach built on reliable taxpayer identification systems, integrated financial data, efficient dispute resolution mechanisms, and harmonised coordination between federal and subnational authorities.

Such alignment, he noted, would help curb leakages, eliminate multiple taxation, and restore confidence in the tax system.