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KPMG flags red signals in new tax laws
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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.
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.
“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
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.”
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.”
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.”
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)
A late-night fire has destroyed six houses, several shops and storage facilities at Kofar Wanbai Market in Kano State, with property worth millions of naira reportedly lost.
The fire broke out at about 9:43pm on Friday in the Babban Layi, Yan Robobi section of the market, according to the Kano State Fire Service.
The agency’s Public Relations Officer, Saminu Abdullahi, confirmed the incident in a statement issued on Saturday.
He said a distress call from a Principal Fire Superintendent, Usman Idris Fagge, prompted the immediate deployment of firefighting teams from the state headquarters and stations at Rijiyar Zaki, Sabon Gari, Government House and Bompai.
Abdullahi said firefighters arrived to find the blaze had engulfed parts of a two-storey building measuring about 120 by 125 feet and used mainly as plastic shops and storage facilities.
He identified the affected houses as Gidan Alhaji Sani, Gidan Sani Muhammad, Gidan Alhaji Kwa Kwa, Gidan Alhaji Shafi’u and Gidan Alhaji Sulaiman.
According to him, the fire started on the upper floor before spreading to two shops on the ground floor, two on the first floor, six permanent stores and four temporary units on the top floor.
Firefighters eventually brought the inferno under control and prevented it from spreading to adjoining sections of the busy market.
Preliminary findings by the fire service indicated that the blaze was caused by a faulty solar system installation.
The Director of the Kano State Fire Service, Sani Anas, urged traders and residents to observe fire safety measures, install smoke detectors and ensure that functional fire extinguishers are available in commercial and residential premises.
A Kaduna-based man, Nasiru Musa Idris, has accused Islamic cleric Sheikh Ahmad Gumi of allegedly keeping his Moroccan wife away from him for about 11 months after he took her to the cleric for counselling.
Idris made the allegation in an interview with RFI Hausa, claiming he took his wife to Gumi after the cleric requested to counsel her because she was young.
According to him, his wife stopped responding to his calls after the meeting, while attempts to have security agencies investigate the matter were allegedly frustrated.
“For 11 months now, my wife has been in his hands through injustice and ill-treatment. He has no relationship with her; she had never known him. The only place they knew each other was through me,” Idris alleged.
Gumi, however, has denied the allegation, insisting that the Moroccan woman had already left Nigeria and was in Morocco with her parents.
The cleric, who declined to provide further details because the matter is before a court, also threatened to sue Idris for defamation.
“But I will take him to court for defamation against me. As for the issue of the girl, she has already left Nigeria and she is in Morocco happily with her parents,” Gumi said.
Idris said he first met Gumi at a pharmacy on Isa Kaita Road in Kaduna while he was with members of his family and later introduced his Moroccan wife to the cleric.
He said his wife had no prior connection with anyone in Nigeria before he travelled to Morocco to marry her, adding that the marriage was conducted with the approval of her parents and relevant authorities.
“The Moroccan girl had never known anyone in Nigeria and nobody knew her except through me. I went to seek her hand in marriage in her country, and we had an engagement with the approval of the embassy and the approval of her parents,” he said.
The dispute, according to Idris, escalated after Gumi allegedly asked him to obtain another marriage certificate from a Sharia Court despite the couple already having marriage documents issued in Morocco and Nigeria.
“I told him that I did not agree with the marriage certificate he told me to obtain. Later, he went to the Sharia Court in Malali and asked them to issue one to him,” Idris alleged.
He said he submitted several documents supporting the marriage, including papers from Nigeria’s Ministry of Foreign Affairs and the Nigerian embassy in Morocco, alongside other documents and a police character report.
Idris further alleged that Gumi later sought the dissolution of the marriage and interfered with efforts by security agencies to investigate the matter.
He urged the cleric to honour a police invitation and submit himself to questioning.
“My complaint is that he should come forward and answer the invitation of the police so that an investigation can be conducted. If he is right, there is nothing stopping him from going to the authorities to clear his name,” he said.
Idris also rejected claims that his wife’s mother travelled to Nigeria and took her daughter back to Morocco.
He maintained that he personally processed the documents that enabled his wife to travel to Nigeria, insisting that he only took her to Gumi because he trusted the cleric and believed he was seeking to help the young woman.
“Because I trusted him, I took her there. From then on, whenever I called, she did not answer the phone,” he alleged.
Meanwhile, Malam Nasiru Ayuba, popularly known as Dan Agaji, chairman of the Volunteers of Sultan Bello Mosque, Kaduna, and Gumi’s personal assistant on special assignment, denied that the cleric kept Idris’ wife in his house.
“The allegation that Malam kept his wife in his house is not true. It was the woman herself who went to Malam to ask him for help,” Ayuba said.
He claimed that the Moroccan woman approached Gumi over a personal matter and sought his intervention, after which the cleric took the matter to court.
“She brought the matter herself because she knew what she was going through. Th
Today sons and daughters of Ikwerre LGA in Port Harcourt held a civic reception in his honour.
The message was as they declare that on election day, before 11 am, Rotimi Amaechi will tell his people to boycott the election because he knows there’s no way he’ll defeat us. If he wins his village, Ubima, then he has won the election. That’s if he will win his own polling unit.
Watch below:
Fire Guts Kano Market, Destroys Six Houses, Shops, Warehouses
Moroccan Wife Has Been Away From Me for 11 Months — Husband Accuses Sheikh Gumi
Watch Wike delivering his speech at civic reception held in his honour today
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