Connect with us

News

KPMG flags red signals in new tax laws

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

KPMG, globally renowned auditing firm with expertise on tax services, says it has identified loopholes in the new tax laws.

The Presidential Fiscal Policy and Tax Reforms Committee had said it proposed the laws to provide better oversight on government revenues, and streamline tax administration in Nigeria to bring it closer to best practices globally and improve efficiencies in tax administration.

However, since President Bola Tinubu assented to the laws on June 26, 2025, there have been different forms of controversies surrounding them.

The laws – the Nigeria Tax Act (NTA) and the Nigeria Tax Administration Act (NTAA) – became effective on January 1, 2026.

Advertisement

Other are – the Nigeria Revenue Service Establishment Act (NRSEA) and the Joint Revenue Board Establishment Act (JRBEA) – which had become effective since June 26, 2025, were activated on January 1, 2026.

In a newsletter titled, “Nigeria’s New Tax Laws: Inherent Errors, Inconsistencies, Gaps and Omissions”, KPMG called for urgent reviews to ensure the attainment of the tax reform objectives.

The piece said that if well implemented, there are many provisions in the laws that would result in increased revenue for the government.

But it laid emphasis on the need to strike a balance between revenue generation and sustainable growth.

Advertisement

“Section 3(b)&(c) of the NTA – Imposition of tax – Error/Gap – The section specifies persons on

whom taxes should be levied, including individuals, families, companies or enterprises, trustees, and an estate, but omits ‘community.’ However, community’ is included in the definition of ‘person’.”

Under Section 201.

“Recommendation – If the intention is to impose tax on communities, this should be explicitly

Advertisement

introduced in Section 3. Otherwise, the law should clearly state that communities are now exempt from tax.

“Section 6(2) of the NTA – Controlled foreign companies (CFC) Error/Gap – The Act states that undistributed foreign profits are to be “construed as distributed” but also mandates that they be “included in the profits of the Nigerian company” (implying income tax at 30%). Though dividend distributed by a Nigerian company is deemed to be franked investment income, this does not appear to be the case with dividends distributed by foreign companies. It thus appears that such dividends will be taxed at the income tax rate. Consequently, there will be differences in the treatment of dividends distributed by Nigerian companies and those distributed by foreign companies.

KPMG in its latest newsletter titled, “Nigeria’s New Tax Laws: Inherent Errors, Inconsistencies, Gaps and Omissions”, reaffirmed the potential of the laws to transform tax administration in the country.

“Recommendation – Modify the section by providing clarity on the treatment of foreign and local dividends.”

Advertisement

Citing an error/gap in Section 17(3) (b) of the NTA which bothered on taxation of non-resident persons, KPMG recommended that Section 6(1) of the NTAA should be updated to include not only non-residents that derive passive income from investments in Nigeria but also income in which the deduction at source is the final tax.

This, it stated, would clearly absolve non-residents from the tax registration requirement where they have no Permanent Establishment (PE) or Significant Economic Presence (SEP) in the country.

The report stated, “This section specifies the conditions under which profits derived by a non-resident are taxable in Nigeria. Although Section 17(4) of the NTA states that payment deducted at source in respect of payments by Nigerian residents to non-residents, irrespective of where the service is rendered, shall be final tax where the non-resident has no permanent establishment (PE) or Significant Economic Presence (SEP) in Nigeria to which the payment is attributable, it does not clearly absolve the non-resident from tax registration requirements under Section 6(1) of the NTAA.

“This in, our view, cannot be the intention of the law. The intention should be that non-residents that do not have PE or SEP in the country should not be required to file tax returns as provided for in Section 11(3) of the NTAA.”

Advertisement

The section states that expenses incurred in a currency other than the naira may only be deducted to the extent of its naira equivalent at the official exchange rate published by the Central Bank of Nigeria (CBN).

According to KPMG, this implied that where a business buys forex at a rate that is higher than the official rate, such a company cannot claim tax deduction for the difference in value between the official and the other rates.

The intention, it noted, is to discourage speculative foreign exchange transactions and encourage the appreciation of the naira, adding however, that issues surrounding the accessibility of all forex needs due to supply problems have not been fully considered.

“We do not think that this condition is necessary at this time. With the current state of the economy, focus should be on improving liquidity and introducing stricter reporting requirements to track and monitor foreign exchange transactions.”

Advertisement

KPMG also picked holes in Section 21 of the NTA which includes expenses on which VAT had not been charged.

“This means that such expenses will not be considered allowable tax deductions even when those expenses have been validly incurred for business purposes. This implies that a company could be held accountable for any inaction or non-performance by its suppliers or service providers.”

“While the defaulting service providers may eventually be required to pay the VAT during an audit or investigation, the company will have already been denied the ability to claim a deduction for the related expense,” it said.

(Daily Trust)

Advertisement
Continue Reading
Advertisement

News

BREAKING: Senators turn to sprinters as fire engulfs section of Senate wing

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

A fire erupted on Wednesday in the Senate wing of the National Assembly complex in Abuja, prompting immediate concern and response from lawmakers and staff on the premises.

In a Footage circulating on social media, including from Africa Independent Television (AIT), shows thick smoke billowing from a room as senators and other personnel gathered nearby.

The video also captures hazy conditions inside adjacent areas, including what appears to be a pantry or kitchen space with chairs stacked and smoke visible.

According to preliminary reports, the incident occurred in a section of the Senate wing. Senators were described as being actively involved in efforts to put out the fire. No immediate reports of casualties have emerged, and those present appear to have evacuated or moved to safer areas within the complex.

Advertisement
Continue Reading

News

FCT Projects Commissioning: Tinubu Urges Abuja Residents to pay Ground Rent, Other Taxes To Enjoy More Developmental Projects(Photos)

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

President Bola Ahmed Tinubu has urged residents and business owners in the Federal Capital Territory (FCT) to fulfil their civic obligations by paying taxes, land charges and ground rents, saying such compliance would enable government to deliver more infrastructure projects across the territory.

Tinubu made the call on Wednesday during the commissioning of the full-scope development of Arterial Road N5 (Obafemi Awolowo Way), stretching from Life Camp Junction to Ring Road III in Dape District, Abuja.

Represented by Vice President Kashim Shettima, the President said infrastructure development must be driven by a partnership between government and citizens.

“To the residents and business owners enjoying this transformation, I urge you to meet your obligations. Pay your taxes. Clear your land fees and ground rents. Your compliance gives the FCT Administration the strength to build more roads like this one,” he said.

The President described the newly completed road as a critical economic corridor that would ease traffic congestion, improve connectivity and unlock investment opportunities within the nation’s capital.

Recalling the commissioning of the Gwarinpa I District section of the road in June 2025, Tinubu said his administration had fulfilled its promise to complete the remaining section.

“On that day, we made a pledge to you. We promised not to leave this vital artery half-done. Because the Renewed Hope Agenda is not about abandoned projects; it is about delivery from start to finish.

“And so today, we are back. We are back to close the circle. We are back to commission the Dape District Section of Arterial Road N5, from Life Camp Junction to Ring Road III,” he stated.

The President stressed that the project was conceived, funded and completed under his administration, noting that it was awarded to Julius Berger Plc with a strict 15-month completion timeline after it was flagged off in October 2024.

According to him, the era when major infrastructure projects lingered for years without completion is over.

Advertisement

“We conceived it, we funded it, and we delivered it. In the past, projects like this became permanent budget lines ten, fifteen years of excuses. Not under this administration,” Tinubu declared.

He commended the Minister of the Federal Capital Territory, Barr. Nyesom Wike, describing him as the administration’s “Engine of Execution” and applauded Julius Berger for delivering quality work within schedule.

“Minister Wike, you and your team have shown what happens when political will meets accountability. We fund projects to see results, not to listen to grammar,” he added.

Tinubu noted that the completion of the N5 corridor would significantly reduce travel time for commuters and provide seamless connectivity among Dape, Karmo, Gwarinpa I, Kado, Idu and Mbora districts.

He further explained that the road would provide direct access to the Idu Industrial District, thereby lowering logistics costs, attracting investments and creating jobs.

“Beyond that, this road opens a direct gateway to the Idu Industrial District. That means lower logistics costs for businesses, new investment, and more jobs for our people,” he said.

Advertisement

The President also called on traditional rulers, community leaders and residents to protect public infrastructure from vandalism and ensure proper maintenance of drainage systems and streetlights.

Earlier, FCT Minister Barr. Nyesom Wike said the commissioning marked the second day of a 31-day project inauguration programme organised to commemorate the third anniversary of the Tinubu administration.

According to him, the scale of infrastructure delivery in the FCT has increased steadily since the administration came into office.

“On June 24, 2024, when we had the first-year anniversary of Mr. President, we took nine days of commissioning of projects. In the second year anniversary, we took 19 days. To the glory of God, in this third year, we are touching 31 days of commissioning of projects,” Wike said.

Advertisement

The minister credited Tinubu for providing the political support needed to transform the FCT, saying the Renewed Hope Agenda had translated into visible infrastructure development across Abuja and the satellite towns.

“For the first time, development has been taken to the satellite towns in the Federal Capital Territory. This is unprecedented. Before this period, satellite towns did not know what they call government. Today, they can feel the impact and presence of government,” he stated.

Wike praised Julius Berger for completing both sections of the project within record time, revealing that the Gwarinpa section was delivered within seven months.

He also defended the FCT Administration’s handling of compensation issues during the road construction, insisting that all affected property owners whose structures were demolished were duly compensated.

Advertisement

“We paid. If you are saying that because you are from that place and development has passed and government did not dash you money, we don’t dash money when we are carrying out development,” he said.

The minister dismissed protests by some individuals at the event, insisting that infrastructure projects across the territory had demonstrated the administration’s commitment to governance and development.

Earlier in her remarks, Minister of State for the FCT, Dr. Mariya Mahmoud, described the project as another milestone under the Renewed Hope Agenda and a reflection of President Tinubu’s commitment to improving connectivity, stimulating economic growth and enhancing residents’ quality of life.

Mahmoud paid tribute to Wike for what she described as his purposeful leadership and unwavering commitment to transforming Abuja through the delivery of critical infrastructure.

Advertisement

She also thanked traditional rulers, community leaders and residents of Life Camp, Dape District and neighbouring communities for their cooperation throughout the execution of the project.

The minister expressed confidence that the newly commissioned road would improve transportation, boost commercial activities and support sustainable urban development in the Federal Capital Territory.

Continue Reading

News

INSECURITY: Vice principal two others killed as bandits invade Kogi community, attempt to kidnap WAEC candidates

Published

on

ADVERTISEMENT
Zoom Ad
ADVERTISEMENT
Zoom Ad

Panic engulfed Iluke Bunu, a community in Kabba-Bunu Local Government Area of Kogi State, on Wednesday morning after suspected bandits launched a deadly attack that left three people dead, including a school vice principal.

The bandits, who reportedly invaded the community in large numbers, were said to have targeted students sitting for the ongoing West African Senior School Certificate Examination (WASSCE), sparking fears of a mass abduction.

According to local sources, the gunmen stormed the area in the early hours of June 10, unleashing gunfire that sent residents and students scrambling for safety. The incident disrupted normal activities in the community and created widespread panic among residents.

A community member who spoke about the attack described the situation as terrifying, revealing that the sound of sustained gunfire echoed across the area as people fled to avoid being caught in the violence.

Advertisement

He said we woke up to heavy gunfire this morning. The bandits entered the community and there was confusion everywhere.

Residents were running in different directions for safety, while students writing their WAEC examinations became terrified,” the source said.

The source further revealed that the attackers appeared determined to abduct students and school personnel but were thwarted by the swift intervention of security operatives and local vigilantes.

According to him, soldiers stationed at a nearby military formation responded quickly after receiving distress calls and engaged the gunmen in a fierce exchange of gunfire.

Advertisement

He explained that if not for the prompt response of the soldiers and local vigilante groups, many students could have been kidnapped.

The security forces confronted the attackers and eventually forced them to retreat.

During the attack, three people reportedly lost their lives. Among the victims was Mr. Gani Anifowose, Vice Principal of Government Secondary School, Aharha-Bunu. Two other individuals were also killed in the violence, although details about their identities were not immediately available.

Another resident expressed concern over the deteriorating security situation in the area, noting that many community members remain traumatised by the incident.

Advertisement

According to him, our community is facing serious security challenges. The gunshots lasted for a long time, and people are still searching for some residents whose whereabouts remain unknown,” the resident said.

Sources within the community stated that troops from the Nigerian Army formation in Suku-Kiri Bunu led the response operation.

The soldiers reportedly engaged the attackers in a gun battle, preventing them from carrying out their mission.

During the confrontation, one of the suspected bandits was allegedly shot dead, while several others escaped into nearby forests and bushes.

Advertisement

The attack has renewed concerns over insecurity in parts of Kogi State, particularly in rural communities where residents have repeatedly faced threats from armed criminal groups. It has also raised fresh questions about the safety of students and educational institutions amid ongoing national examinations.

Residents have called on the government and security agencies to strengthen security presence in vulnerable communities and take decisive action to prevent future attacks on schools and innocent civilians.

Continue Reading

Trending

Copyright © 2024 Naija Blitz News