The Digest:
Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has dismissed claims that the Nigeria Tax Act 2025 introduces a 25 percent tax on building materials, describing the allegation as false and misleading. In a post on X, Oyedele clarified that the Act, which has already commenced, contains no provision imposing a 25 percent tax on construction funds, bank balances, or business expenses. Instead, the law provides VAT exemption on land and buildings (Section 185(l)), reduced 2 percent withholding tax on construction contracts, mortgage interest deductions for homeowners, and rent relief of up to ₦500,000 for tenants. The Act also offers tax relief for Real Estate Investment Trusts (REITs) and priority sector incentives for building material manufacturers, including up to 10 years tax exemption.
Key Points:
- The clarification prevents panic and misinformation that could disrupt the real estate and construction sectors.
- Tax relief provisions lower housing costs, benefiting developers, homeowners, and tenants.
- Homebuilders and renters gain financial relief, while the construction sector enjoys reduced tax burdens.
- This signals the government's intent to stimulate housing development through targeted tax incentives.
- The timing, with 2027 elections approaching, counters potential political exploitation of tax reforms.
Sources: Nigerian Tribune, Taiwo Oyedele/X
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Taiwo Oyedele, Nigeria Tax Act 2025, Rotimi Amaechi,
