FG debunks Amaechi’s claim, says Nigeria Tax Act has no 25% levy on building materials

The Federal Government of Nigeria has dismissed claims that the Nigeria Tax Act 2025 introduces a 25 per cent levy on building materials, construction funds, or bank balances, describing the allegation as false and misleading.

The clarification was issued on Sunday by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, in a statement shared on X, in response to a viral video featuring former Minister of Transportation, Rotimi Amaechi.

In the video, Amaechi warned of looming economic hardship should the All Progressives Congress retain power after the 2027 elections, alleging that the new tax law would impose heavy charges on construction-related transactions.

“The tax law is if I pay you 100 million Naira for your building materials, automatically 25 million will leave your account.

“If you are a landlord and building a house, you will charge 25% extra because you won’t bear it alone; you will transfer it to the person who buys or rents,” the former minister stated.

Responding, Oyedele rejected the assertions, insisting that both the timeline and the substance of the claims were inaccurate.

“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.

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“Both claims are incorrect. Contrary to the misinformation seeking to create fear, panic and disaffection, the Nigeria Tax Act 2025 has already commenced and does not impose a 25% tax on construction funds, bank balances, or business expenses.

“Instead, it contains provisions specifically designed to reduce the cost of housing, rent and real estate development,” he said.

Oyedele explained that the Act includes targeted incentives to lower housing costs and stimulate real estate growth. According to him, land and buildings are exempt from Value Added Tax under Section 185(l), while contractors are allowed to recover input VAT on materials, assets and overheads where VAT applies.

He added that the Act introduces a reduced Withholding Tax rate of two per cent for construction contracts and allows individuals developing owner-occupied homes to deduct mortgage interest from taxable income under Section 30(2)(iv).

Property owners earning rental income, Oyedele noted, are also permitted to deduct expenses such as repairs, insurance and agency fees in line with Section 20 of the Act.

Addressing tenant reliefs, he said renters can claim tax relief of up to ₦500,000, equivalent to 20 per cent of annual rent, under Section 30(2)(vi), stressing that the overall intent of the law is to ease, not worsen, the cost of housing in the country.

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