Global VAT & Indirect Tax News

Nigeria’s 2025 Tax Act removes VAT on land, completed buildings, and both residential and commercial rent, effective January 2026. The reform allows contractors to recover input VAT on construction materials and gives tenants rent relief up to ₦500,000, capped at 20 % of annual rent. Mortgage interest for owner‑occupied homes remains tax‑deductible.

Nigeria’s Tax Act 2025 has fully exempted land, buildings and rent from Value Added Tax, aiming to lower housing costs and stimulate real‑estate investment. The law also reduces construction withholding tax to 2 % and allows mortgage interest on owner‑occupied homes to be deducted. Additional reliefs include rent relief up to ₦500,000 and various tax incentives for small businesses and real‑estate investors.

Nigeria is tightening VAT and withholding tax compliance by moving from retrospective audits to real‑time reporting of business transactions. The shift, part of a broader fiscalisation strategy, will give tax authorities direct visibility into transactions as they occur, starting with large taxpayers. The e‑invoicing platform will enhance existing filing systems and encourage participation through engagement and simulation portals.

On 16 January 2026, the Nigeria Revenue Service clarified that VAT on banking services has always applied to fees, commissions and service charges, not to the money transferred. The NRS confirmed that the Nigeria Tax Act does not impose new tax obligations on bank customers and urged stakeholders to rely on official channels for accurate information.