Taiwo Oyedele counters Rotimi Amaechi’s viral remarks, insists new tax law is already in force and introduces reliefs for landlords, renters and developers…..
The Federal Government has pushed back against claims that the Nigeria Tax Act 2025 imposes a 25 per cent levy on building materials, construction-related transactions, or bank balances.
The clarification was issued on Sunday by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, in response to a viral video featuring former Minister of Transportation, Rotimi Amaechi.
In the widely circulated clip, Amaechi warned that Nigerians could face deeper economic hardship if the ruling All Progressives Congress remains in power beyond the 2027 elections. He alleged that under the new tax regime, a 25 per cent deduction would automatically apply to payments for building materials.
“The tax law is if I pay you 100 million Naira for your building materials, automatically 25 million will leave your account,” Amaechi claimed, adding that landlords would inevitably transfer the cost to tenants through higher rents.
‘Both Claims Are Incorrect’ — Oyedele
Responding via a statement posted on X, Oyedele dismissed the assertions as inaccurate.
According to him, the claims that the law would only commence in 2027 and that it introduces a 25 per cent charge on construction funds or transactions are false.
“The Nigeria Tax Act 2025 has already commenced and does not impose a 25% tax on construction funds, bank balances, or business expenses,” he stated.
Rather than introducing new burdens, Oyedele argued that the legislation contains measures specifically designed to lower the cost of housing and stimulate real estate development.
Key Housing and Construction Reliefs
Highlighting provisions within the Act, Oyedele pointed to several tax incentives aimed at reducing pressure on developers, landlords and tenants:
- Land and buildings are exempt from Value Added Tax (VAT) under Section 185(l).
- Contractors can recover input VAT on materials, assets and overheads where VAT applies.
- A reduced Withholding Tax rate of 2 per cent now applies to construction contracts.
- Mortgage interest is tax-deductible for individuals building owner-occupied homes under Section 30(2)(iv).
- Property owners earning rental income can deduct expenses such as repairs, insurance and agency fees under Section 20.
For tenants, he noted that individuals may claim rent relief of up to ₦500,000, representing 20 per cent of annual rent, under Section 30(2)(vi).
Additionally, rent remains exempt from VAT, while lease agreements valued below ₦10m annually or below 10 times the annual minimum wage are exempt from stamp duty under Section 134.
Incentives for Investors and Developers
Oyedele also outlined broader incentives embedded in the law:
- Individuals are exempt from Capital Gains Tax when disposing of a dwelling house under Section 51(1).
- Real Estate Investment Trusts (REITs) enjoy Companies Income Tax exemptions if they distribute at least 75 per cent of dividend or rental income within 12 months, under Section 162(c).
- Manufacturers of building materials such as iron, steel and domestic appliances qualify for priority sector tax incentives for up to 10 years.
- Large companies may see Companies Income Tax reduced from 30 per cent to 25 per cent under Section 56.
- Small businesses benefit from zero per cent Companies Income Tax, VAT exemptions and no Withholding Tax deductions on invoices.
‘Fact, Not Fear’
Oyedele stressed that the Act does not introduce any tax on money in bank accounts or transfers for purchasing construction materials.
“It does not tax money in bank accounts. It does not tax transfers for buying building materials. It does not introduce a 25% construction or business cost tax. It does not delay implementation until 2027,” he said.
Describing the viral claims as misleading, he urged Nigerians to verify alarming statements against the actual text of the law.
“Fact, not fear evidence beats emotion. If anyone makes an alarming claim, ask them: ‘Where is it in the law?’” he added.
According to the committee chairman, the intent of the reform is to ease, not increase, housing costs with the expectation that rents should decline rather than rise under the new framework.
