Nigerian Govt Trashes Amaechiโs Claims On 25% Building ๐๐๐ฑ
President Bola Tinubuโs Government has clarified unfounded claims by the former Governor of Rivers State, Rotimi Amaechi, that the Nigeria Tax Act 2025 has imposed a 25% tax on funds for building materials and other transactions.
In statement titled โ๐๐ฅ๏ฟฝ๏ฟฝ๐ซ๐ข๐๐ข๐๐๐ญ๐ข๐จ๐ง for Amaechi and others: ๐๐ก๐ ๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐ฑ ๐๐๐ญ 2025 ๐ก๐๐ฌ ๐๐จ๐ฆ๐ฆ๐๐ง๐๐๐ ๐๐ง๐ ๐๐จ๐๐ฌ ๐๐๐ ๐๐ฆ๐ฉ๐จ๐ฌ๐ ๐ 25% ๐๐๐ฑ ๐จ๐ง ๐๐ฎ๐ข๐ฅ๐๐ข๐ง๐ ๐๐๐ญ๐๐ซ๐ข๐๐ฅ๐ฌ ๐จ๐ซ ๐ ๐ฎ๐ง๐๐ฌโ the presidency described both claims by Mr Amaechi who also served as minister of Transport in the administration of Late President Muhammadu Buhari as โincorrectโ.
The statement readsโฆ.
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. 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.
๐๐๐ฒ ๐๐ซ๐จ๐ฏ๐ข๐ฌ๐ข๐จ๐ง๐ฌ ๐จ๐ ๐ญ๐ก๐ ๐๐ข๐ ๐๐ซ๐ข๐ ๐๐๐ฑ ๐๐๐ญ, 2025
Relevant provisions to make housing more affordable, encourage real estate development, and support small business property contractors and low-income renters include:
1. ๐ณ๐๐๐๐ ๐ช๐๐๐ ๐๐ ๐ฉ๐๐๐๐ ๐๐๐ ๐๐๐ ๐ท๐๐๐๐๐๐๐ ๐ซ๐๐๐๐๐๐๐๐๐๐
– ๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ข๐ฏ๐ฅ ๐ข๐ฏ๐ฅ ๐๐ถ๐ช๐ญ๐ฅ๐ช๐ฏ๐จ๐ด (๐.185(๐ญ)): Land and buildings are now specifically exempt from Value Added Tax (VAT).
– ๐๐ฏ๐ฑ๐ถ๐ต ๐๐๐ ๐๐ณ๐ฆ๐ฅ๐ช๐ต๐ด ๐ง๐ฐ๐ณ ๐๐ฐ๐ฏ๐ต๐ณ๐ข๐ค๐ต๐ฐ๐ณ๐ด: Where VAT is chargeable on any materials or service, contractors can now recover VAT on their assets and overhead costs, which lowers overall construction costs.
– ๐๐ฆ๐ฅ๐ถ๐ค๐ฆ๐ฅ ๐๐ช๐ต๐ฉ๐ฉ๐ฐ๐ญ๐ฅ๐ช๐ฏ๐จ ๐๐ข๐น (๐๐๐): A lower 2% WHT rate is applicable on construction contracts, helping to conserve cash flow and reduce financing pressure on developers.
– ๐๐ฐ๐ข๐ฏ ๐๐ฏ๐ต๐ฆ๐ณ๐ฆ๐ด๐ต ๐๐ฆ๐ฅ๐ถ๐ค๐ต๐ช๐ฐ๐ฏ (๐.30(2)(๐ช๐ท)): Mortgage interest is tax-deductible for individuals developing an owner-occupied residential house.
– ๐๐ฆ๐ฅ๐ถ๐ค๐ต๏ฟฝ๏ฟฝ๐ฃ๐ญ๐ฆ ๐๐ฆ๐ฏ๐ต๐ข๐ญ ๐๐น๐ฑ๐ฆ๐ฏ๐ด๐ฆ๐ด (๐.20): Property owners who earn rental income can deduct related costs such as repairs, insurance, and agency fees.
2. ๐ซ๐๐๐๐๐ ๐น๐๐๐๐๐ ๐๐๐ ๐น๐๐๐๐๐๐ ๐๐๐ ๐ป๐๐๐๐๐๐
– ๐๐ฆ๐ฏ๐ต ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.30(2)(๐ท๐ช)): Individuals can claim relief up to โฆ500,000 (20% of annual rent), increasing disposable income for low-income earners.
– ๐๐๐ ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ ๐ฐ๐ฏ ๐๐ฆ๐ฏ๐ต (๐.185(๐ญ)): The VAT exemption on land and buildings also covers rent which is fully exempt from Value Added Tax.
– ๐๐ต๐ข๐ฎ๐ฑ ๐๐ถ๐ต๐บ ๐๐ฆ๐ญ๐ช๐ฆ๐ง (๐.134): Lease agreements with an annual value below โฆ10,000,000 (or 10 times the annual minimum wage) are exempt from stamp duty.
3. ๐ฐ๐๐๐๐๐๐๐๐๐ ๐๐๐ ๐ฐ๐๐๐๐๐๐๐๐ ๐๐๐ ๐ซ๐๐๐๐๐๐๐๐๐
– ๐๐ข๐ฑ๐ช๐ต๐ข๐ญ ๐๐ข๐ช๐ฏ๐ด ๐๐ข๐น ๐๐น๐ฆ๐ฎ๐ฑ๐ต๐ช๐ฐ๐ฏ (๐.51(1)): Individuals pay no Capital Gains Tax (CGT) when disposing of a dwelling house or an interest in one.
– ๐๐๐๐ ๐๐ฏ๐ค๐ฆ๐ฏ๐ต๐ช๐ท๐ฆ๐ด (๐.162(๐ค)): Real Estate Investment Trusts (REITs) are exempt from Companies Income Tax (CIT) when distributing at least 75% of their dividend or rental income within 12 months after the financial year-end.
– ๐๐ณ๐ช๐ฐ๐ณ๐ช๐ต๐บ ๐๐ฆ๐ค๐ต๐ฐ๐ณ ๐๐ฏ๐ค๐ฆ๐ฏ๐ต๐ช๐ท๐ฆ๐ด: Manufacturing of building materials such as iron, steel, and domestic appliances qualifies for specific tax exemption under the economic development incentive scheme for up to 10 years.
– ๐๐ฆ๐ฅ๐ถ๐ค๐ฆ๐ฅ ๐๐ฐ๐ณ๐ฑ๐ฐ๐ณ๐ข๐ต๐ฆ ๐๐ข๐น ๐๐ข๐ต๐ฆ (๐.56): Scope for the reduction of companies income tax rate for large businesses from 30% to 25%.
4. ๐ท๐๐๐๐๐๐๐๐๐ ๐๐๐ ๐พ๐๐๐๐๐๐ ๐๐๐ ๐บ๐๐๐๐ ๐ฉ๐๐๐๐๐๐๐๐๐
– ๐๐ข๐ฑ ๐ฐ๐ฏ ๐๐ฐ๐ถ๐ด๐ช๐ฏ๐จ ๐๐ฆ๐ฏ๐ฆ๐ง๐ช๐ต ๐๐ข๐น (๐.14(6)): The taxable value of employer-provided accommodation is limited to the annual rental value, subject to a maximum of 20% of the employee’s annual gross employment income, excluding the rental value.
– ๐๐ฎ๐ข๐ญ๐ญ ๐๐ฐ๐ฎ๐ฑ๐ข๐ฏ๐บ ๐๐ฆ๐ญ๐ช๐ฆ๐ง: Suppliers and contractors who qualify as small companies benefit from 0% Companies Income Tax (CIT), exemption from charging VAT and no deduction of Withholding Tax (WHT) from their invoices and payments.
5. ๐พ๐๐๐ ๐๐ ๐ต๐ถ๐ป ๐๐ ๐๐๐ ๐ป๐๐ ๐ณ๐๐
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.
– Delay implementation until 2027.
๐๐จ๐ง๐๏ฟฝ๏ฟฝ๐ฎ๐ฌ๐ข๐จ๐ง:
Claims suggesting a new tax on building materials or bank funds are false and misrepresent the law. Rather, the new tax law specifically introduced measures to make housing more affordable, promote real estate development, incentivise manufacturing of building materials, and grant rent reliefs to tenants to enhance their disposable income.
๐ ๐๐๐๐ ๐๐๐๐:
โFact Not Fearโ, evidence beats emotion. If anyone makes an alarming claim or tries to misinform you, ask them โWhere is it in the law?โ
With the new tax laws, housing should become more affordable and rent should go down NOT up!
โ ๐๐ณ๐ฆ๐ด๐ช๐ฅ๐ฆ๐ฏ๐ต๐ช๐ข๐ญ ๐๐ช๐ด๐ค๐ข๐ญ ๐๐ฐ๐ญ๐ช๐ค๐บ ๐ข๐ฏ๐ฅ ๐๐ข๐น ๐๐ฆ๐ง๐ฐ๐ณ๐ฎ๐ด ๐๐ฐ๐ฎ๐ฎ๐ช๐ต๐ต๐ฆ๐ฆ
