Thread by @PwC_Nigeria

The proposed National Housing Fund (NHF) law will affect you in a big way. #PwCTaxChat today will share key insights on the law. Thank you for joining us #TaxThursday

Shelter is a basic need for all people, next only to food, water and sleep according to Maslow's Hierarchy of Needs Theory. #TaxThursday #PwCTaxChat

In Nigeria, the real estate sector which incorporates housing has struggled for decades contributing less than an average of 7 percent to GDP and under 1 percent to employment. #PwCTaxChat #TaxThursday

The sector has been in decline for the better part of the last 5 years. Compared to the rest of the world where it is the largest sector in countries like the US, Canada and Australia in terms of contributions to GDP and employment generation. #PwCTaxChat #TaxThursday

The NHF was established by the NHF Act of 1992 to mobilise funds that will facilitate the provision of affordable housing for Nigerians. #PwCTaxChat #TaxThursday

Under the extant NHF law, every Nigerian earning N3,000 or more per annum is required to contribute 2.5% of their monthly basic salary to the NHF. The funds mobilized will be made available to contributors at affordable interest rates to build homes. #PwCTaxChat #TaxThursday

The housing problem hasn't improved significantly from 1992. It is estimated that Nigeria has a deficit of 17 million houses as of August 2012 and requires 700,000 houses annually compared to less than 100,000 currently being built according to the National Bureau of Statistics.

Ironically the cost of building a house in Nigeria is relatively higher while the average income level is relatively lower compared to global average. It costs almost twice as much to build a house in Nigeria compared to India and about 30 percent more than in South Africa.

This means even when there is a supply of housing units, the price tag whether self-built or off the shelf purchase is out of the reach of majority of Nigerian workers thereby making affordable housing still a dream. #PwCTaxChat #TaxThursday

Beyond access to finance, other major challenges facing the sector include poor government policies and bureaucratic regulations, unreliable data and lack of transparency, shortage of high quality building materials, poor infrastructure, shortage of skilled labour etc #PwCTaxChat

NASS has now passed a new NHF Bill that requires mandatory 2.5% contribution of monthly income by employees earning minimum wage & above in public & private sectors to be deducted and remitted monthly by all employers. Self-employed individuals are also to contribute. #PwCTaxChat

Banks, insurance companies & pension fund administrators are to invest a minimum of 10% of their profits before tax into the Fund at an interest rate not exceeding 1% above rate payable on current accounts by banks.
There's also a 2.5% levy on cement, locally produced or imported

Penalty for non-compliance of up to N100 million for corporates and N10m for individuals and sanctions include cancellation of operating licenses of banks, insurance companies and PFAs for violations #PwCTaxChat #TaxThursday

Any contributor who is unable to secure a loan from the scheme and has attained the age of 60 years or 35 years of service will be able to withdraw all contributions made at an interest rate of 2% per annum #PwCTaxChat #TaxThursday