KPMG Flags Errors and Gaps in Nigeria’s New Tax Laws, Calls for Urgent Review

By Emmanuel Kwada 

Global professional services firm KPMG has highlighted significant errors, inconsistencies, gaps, omissions, and lacunae in Nigeria’s newly enacted tax reform laws, urging the government to undertake an urgent review to prevent undermining the reforms’ objectives.

The laws, including the Nigeria Tax Act (NTA) 2025, the Nigeria Tax Administration Act (NTAA), the Nigeria Revenue Service (NRS) Establishment Act, and the Joint Revenue Board Establishment Act, took effect on January 1, 2026. They aim to modernize the country’s tax system, simplify administration, enhance revenue mobilization, and improve competitiveness.

In a detailed newsletter titled “Nigeria’s New Tax Laws: Inherent Errors, Inconsistencies, Gaps and Omissions,” released on January 6, 2026, KPMG acknowledged the transformative potential of the reforms but warned that unresolved flaws could lead to compliance challenges, disputes with tax authorities, reduced investor confidence, and potential capital flight.

One prominent issue flagged by KPMG involves Section 3(b) and (c) of the NTA, which outlines the persons and entities subject to taxation—such as individuals, families, companies, trustees, and estates. However, the section omits the term “community,” despite “community” being explicitly included in the Act’s definition of a “person” under Section 201.

This omission creates uncertainty about whether communities are now liable for taxes or exempt. KPMG recommended that lawmakers either explicitly include communities in the taxable persons list or clearly state their exemption to eliminate ambiguity and avoid future disputes.

Other concerns raised in the report include:

1. Inconsistencies in the treatment of foreign versus domestic dividends under Controlled Foreign Company rules.
2. Unclear registration and filing obligations for non-resident companies without a permanent establishment or significant economic presence in Nigeria.
3. Potential risks of taxing nominal gains in a high-inflation environment, which could burden taxpayers unfairly.

KPMG emphasized that while the reforms represent a positive step toward a more efficient tax regime, prompt legislative amendments and clarifications are essential to align the laws with global best practices and ensure fairness, equity, and effective implementation.

The report comes amid ongoing discussions about the tax reforms, which were signed into law by President Bola Tinubu in 2025 following debates in the National Assembly. Experts have echoed KPMG’s warnings, noting that ambiguities could deter investment and trigger litigation.

The Federal Government has yet to respond officially to KPMG’s findings, but stakeholders are calling for swift action to address the identified shortcomings before they impact businesses and economic growth.