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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)
The Independent National Electoral Commission (INEC) has officially restored three more constituencies in Delta and one more in Kogi State.
INEC has fixed 21st–25th August 2026 for the conduct of party primaries for the restored constituencies.
This was contained in a statement signed by Mohammed Kudu Haruna, National Commissioner and Chairman, Information and Voter Education Committee, on 14th August 2026.
According to the statement, “INEC wishes to notify the public that it has restored four more previously suppressed State House of Assembly constituencies, three more in Delta and one more in Kogi State, pursuant to the judgment of the courts directing the restoration of the additional constituencies in the two states.
“The restored constituencies are: Delta State – Abraka, Isoko North II and Ughelli South II State Constituencies; and Kogi State – Yagba West II State Constituency.
“The Commission has fixed 21st–25th August 2026 for the conduct of party primaries for the restored constituencies.
“This coincides with the period for the conduct of primaries for bye-elections to fill recent vacancies into Gombe/Kwami/Funakaye Federal Constituency of Gombe State, Disina and Sakwa State Constituencies of Bauchi State, Udu State Constituency of Delta State, and Dawakin Kudu State Constituency of Kano State. Elections into these constituencies have been fixed for 19th September 2026.
“For the avoidance of doubt, all other timelines and activities contained in the already published revised Timetable and Schedule of Activities for the 2027 General Election shall apply to the restored constituencies.
“Political parties are requested to submit notices of their various primaries to the Commission before their scheduled dates.
“The Commission remains committed to ensuring credible, inclusive and transparent electoral processes,” it added.
Afrobeats singer David Adeleke, popularly known as Davido, has reacted to a social media user who questioned whether he would return to Osun State to participate in the forthcoming governorship election.
The exchange began after a user identified as Dejiii questioned Davido’s involvement in the election, while also referencing his position as chairman of the Osun Sports Trust Fund.
Davido subsequently responded to the comment, addressing the question over his plans to return to the state for the election.
“Wetin we get pass beef, na him be Osun Sports Trust Fund chairman and he barely says anything or does anything about the role. Didn’t step a foot in Osun since he got appointed, he only starts tweeting and shouting like a retard when his uncle’s election is on the line,” Dejiii wrote.
Responding to the comment, Davido said he would arrive in Osun ahead of the election despite being abroad.
“From the stage to the jet … I’ll be in OSUN before 7am but your broke ass can’t understand how that can be possible,” Davido replied.
The Federal High Court in Abuja on Friday ordered that a former Chairman of the Nigeria Bar Association, Shendam branch, Plateau State, Gabriel Nkup Tsenyen, be remanded in the custody of the Department of State Services pending a decision on the propriety of his fresh arraignment.
Justice Joyce Abdulmalik fixed August 20 to determine whether Tsenyen, who is also a chieftain of the All Progressives Congress in Plateau State, can be tried afresh over allegations of cyberstalking and incitement of public disturbances.
The development followed an attempt by the DSS to arraign the lawyer on a fresh two-count charge bordering on cyberstalking and incitement to breach public peace.
But shortly after Tsenyen was called into the dock to take his plea, his lead counsel, Senior Advocate of Nigeria, Emmanuel Esene, objected to the arraignment.
Esene told the court that his client had already been arraigned before the same court on the same allegations and that the earlier case had been adjourned until September 28 for trial.
He consequently urged the court not to allow the fresh arraignment, arguing that doing so could expose his client to double jeopardy.
However, counsel for the DSS, Muinat Oladunjoye, who appeared for the prosecution from the office of the Attorney-General of the Federation and Minister of Justice, said she was unaware of any previous charge against Tsenyen.
Following the conflicting positions, Justice Abdulmalik requested a copy of the earlier charge from the defence.
Esene produced the document before the court.
The judge subsequently requested the record of proceedings in the earlier case to enable her determine whether Tsenyen had indeed been arraigned on the same allegations.
The defence, however, said it could not produce the record immediately because the fresh charge had come as a surprise to them on Thursday, August 13.
Justice Abdulmalik then ordered that the record of proceedings in the earlier trial be produced on August 20.
Pending the production and examination of the record, the judge ordered that Tsenyen be remanded at the DSS detention facility.
The fresh charge was filed by the Director of Public Prosecutions of the Federation, Rotimi Iseoluwa Oyedepo.
In the first count, the prosecution alleged that Tsenyen, sometime in May 2026, sent a malicious publication on the Ngootuguut local community WhatsApp platform alleging that the entire community was involved in a plot to eliminate him.
The prosecution alleged that he knew the publication to be false and sent it “for the purpose of causing annoyance, insult, criminal intimidation, enmity, hatred, ill will and needless anxiety” in the community.
The alleged offence was said to be contrary to and punishable under Section 24(1) of the Cybercrimes (Prevention, Prohibition, etc.) Act, 2015, as amended.
In count two, the prosecution alleged that the lawyer sent the same publication “with intent to incite or cause breach to public peace.”
The alleged offence was said to be contrary to and punishable under Section 114 of the Penal Code Act, 2004.
The court will on August 20 determine, among other things, whether the fresh charges relate to allegations for which Tsenyen had previously been arraigned and whether the proposed fresh trial is legally permissible.
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