Oyedele Counters Amaechi, Says No 25% Tax on Building Materials Under Nigeria Tax Act 2025

Oyedele Counters Amaechi, Says No 25% Tax on Building Materials Under Nigeria Tax Act 2025

JOEL OLADELE, Abuja

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has dismissed claims circulating in a viral video by former Minister of Transportation, Rotimi Amaechi, that the Nigeria Tax Act 2025 imposes a 25 per cent tax on building materials or bank transactions.

Amaechi had alleged in the video that “The tax law is that if I pay you N100 million for your building materials, automatically N25 million will leave your account,” sparking concerns among business owners and the public.

Reacting through a post on his Facebook page, Oyedele described the claims as incorrect and misleading. He clarified that the Nigeria Tax Act 2025 has already commenced and does not introduce any 25 per cent tax on construction funds, bank balances or business expenses.

“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 claims are incorrect,” he stated.

He stressed that the Act contains provisions designed to reduce the cost of housing, rent and real estate development, rather than increase financial burdens.

According to him, the law specifically exempts land and buildings from Value Added Tax, while also allowing contractors to recover input VAT on materials and services to lower construction costs.

He added that a reduced two per cent Withholding Tax now applies to construction contracts to ease cash flow pressures on developers.

The Act also provides mortgage interest tax deductions for individuals building owner-occupied homes and allows property owners to deduct rental-related expenses such as repairs and insurance.

On reliefs for renters, Oyedele explained that individuals can claim up to N500,000 or 20 per cent of annual rent as tax relief, while rent remains fully exempt from VAT. Lease agreements below N10 million annually are also exempt from stamp duty.

He further highlighted incentives for investors, including capital gains tax exemption on the disposal of dwelling houses and tax incentives for Real Estate Investment Trusts that distribute at least 75 per cent of income within a year.

Manufacturing of building materials such as iron and steel also qualifies for up to 10 years of tax exemption under priority sector incentives.

For small businesses, Oyedele noted that qualifying companies enjoy zero per cent Companies Income Tax, exemption from charging VAT and no withholding tax deductions on invoices.

He categorically listed what the law does not contain.

“The Act does not tax money in bank accounts or bank balances, tax transfers for buying building materials, introduce a 25% construction or business cost tax, or delay implementation until 2027,” he stated.

Dismissing the viral claim as fear-inducing misinformation, Oyedele urged Nigerians to rely on facts rather than emotion.

“Fact Not Fear, evidence beats emotion. If anyone makes an alarming claim or tries to misinform you, ask them ‘Where is it in the law?’” he wrote.

He expressed confidence that with the implementation of the new tax laws, housing should become more affordable and rent should decline rather than rise.