Nigeria: National Assembly Passes The National Housing Fund Establishment Bill 2018

Last Updated: 2 April 2019
Article by Andersen Tax LP
Most Read Contributor in Nigeria, September 2019


On 18 February 2019, the National Assembly passed the National Housing Fund (NHF) Establishment Bill 2018 ("the NHF Bill"). The NHF Bill seeks to repeal the National Housing Fund Act of 1992 and provide for additional sources of funding for financing housing development in Nigeria and other related matters. In addition to the imposition of a compulsory 2.5% deduction on the monthly income of Nigerian workers, the NHF Bill introduces a 2.5% levy payable by manufacturers and importers of Cement and also seeks to impose a compulsory contribution of 10% of profits before tax on banks, Pension Fund Administrators (PFA) and Insurance companies. The Bill now awaits the assent of the President before it becomes a law.


The NHF was established under the NHF Act of 1992 to primarily facilitate the mobilisation of funds for the provision of houses to Nigerians through lendings. However, the NHF Bill has not been quite successful in achieving this objective over the years.

The NHF Bill 2018 seeks to introduce some changes to the operations of the NHF Scheme ("the Scheme"). While the 1992 Act requires a contribution of 2.5% of basic monthly salary from Nigerian workers, the NHF Bill requires a contribution of 2.5% of the total monthly income of Nigerian workers. The NHF Bill also increases the threshold of its application from workers who earn a minimum of ₦3,000 to workers who earn not less than the National Minimum Wage, which is currently ₦18,000. In addition, the NHF Bill expands the scope of the required contributors to the Scheme to include PFAs, local producers and importers of Cement.

Some specific provisions of the Bill are highlighted below:

  • Employees and self-employed persons earning not less than the National Minimum Wage or its equivalent are required to contribute 2.5% to their monthly income to the Fund;
  • Employers are expected to deduct an employee's contribution from his monthly salary and remit to the NHF through the Federal Mortgage Bank within one month of such deduction;
  • A contributor who has attained the age of 60 years or 35 years of service or has reached a retirement age or years of service under any law in Nigeria is entitled to a refund of contribution at an interest rate of 2% per annum; provided that such contributor has no outstanding loan with the loan with the Federal Mortgage Bank;
  • If a contributor dies, his contribution would be paid to his legal personal representative upon presentation of a Will or Letters of Administration;
  • Contributions to the NHF and any refund of contribution are to be exempted from tax;
  • Local manufacturers and importers of cement are required to contribute a "Sustainable Development Levy" to the fund. This levy is to be charged at the rate of 2.5% ex-factory price (before transportation cost) for each bag of 50kg of cement or its equivalent in bulk;
  • The President is empowered to include additional consumer goods and services on which the Sustainable Development Levy may be imposed;
  • The Federal Inland Revenue Service (FIRS) is empowered to collect the Sustainable Development Levy from local manufacturers and importers of Cement. This levy is payable within 60 days after the FIRS has served a notice of assessment on the manufacturer company or importer;
  • Commercial & Merchant Banks, Insurance companies and Pension Fund Administrators (PFA) are required to invest a minimum of 10% of their profit before tax in the fund on a yearly basis. The interest rate on this investment would not exceed 1% of the interest rate payable by banks on current accounts;
  • The Federal Mortgage Bank is empowered to request and inspect books of account and other documents relating to the provisions of the NHF Bill;
  • Contributions or penalties under the NHF can be recovered at any time within 12 years from the date the contribution falls due;
  • Some penalties stipulated in the Bill are outlined below:


The NHF Bill will have significant impacts on businesses, if signed into law by the President. This is because it introduces a new form of compliance burden on companies and individuals, which would trigger penalties if disregarded.

Furthermore, the introduction of the Sustainable Development Levy to be paid by manufacturers and importers of cement may cause further hardships as such companies may pass such cost to the consumers. Also, the introduction of this additional Levy may only result in an increase in cement prices for building and construction, which could impede the ease of doing business in Nigeria. In addition, the powers of the President to include additional goods and services on which Sustainable Development Levy may be imposed by an Executive Order appears arbitrary as it creates uncertainty for investors.

Given that the effective tax rate minimum wage employees is significantly lower than 2.5% of monthly income, an imposition of an additional 2.5% compulsory contribution is a significant deduction to be applied to a low income employee. Perhaps, it would have been more equitable for the bill to seek to apply a graduated contribution rate which is commensurate to the amount earned by individuals to mitigate any economic effect such deductions may cause.

It is important to note that, although the Bill appears not to contain provisions for exemption of contributions to the Fund from tax, NHF contributions are expressly exempted from Personal Income Tax (PIT) under the sixth schedule to the PIT Act. Also, the provision for 2% yearly interest payable upon refund of contribution is rather low in the light of the current inflation rates and other economic circumstances.

Given that the current NHF Act has achieved little towards significantly improving the housing situation of the country, it is uncertain whether an increase in the sources of contributions to the Fund would improve the situation. It would appear that the challenge is more with the implementation of the objective of the Act, which is to provide affordable housing through citizen-friendly loans, than availability of funds.

Notwithstanding the foregoing, we will continue to monitor developments and are willing to provide relevant tax and regulatory advice to companies that require same in this regard.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions