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Nigeria defends new tax laws, says KPMG’s report is self opinionated

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6 months ago

January 10, 2026

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The Presidential Fiscal Policy and Tax Reforms Committee has addressed concerns raised by KPMG, the global advisory services firm, on Nigeria’s recently enacted tax laws, describing much of the firm’s commentary as based on misunderstandings and personal preferences rather than facts.

Recall KPMG had said there are “errors, inconsistencies, gaps, omissions, and lacunae” in the new tax laws that require urgent reconsideration to ensure the achievement of their stated objectives.

However, the committee, in a statement on Saturday, January 10, 2026, acknowledged some useful points on implementation risks but stressed that the majority of KPMG’s observations mischaracterised deliberate policy choices, repeated opinions as errors, and overlooked the broader objectives of the reforms.

The committee clarified key issues, including stock market taxes, saying share gains are not taxed at a flat 30%, adding that 99% of investors qualify for full exemptions, with the tax designed to strengthen corporate fundamentals.

On indirect share transfers, the committee said taxing indirect transfers aligns with global best practices to close loopholes and does not threaten competitiveness.

It noted that no Value Added Tax (VAT) applies to insurance premiums, saying exempting foreign insurance or allowing parallel market forex deductions would harm domestic industries and fiscal policy, adding that the new top marginal rate of 25% is competitive globally and ensures fairness without stifling growth.

The presidential committee also highlighted several factual errors in KPMG’s report, including outdated references to the Police Trust Fund and misinterpretations of small business tax thresholds.

It further emphasised that the reform introduces major benefits, such as simplification, tax harmonisation, reduced corporate tax rates, expanded input VAT credits, and incentives for small businesses and priority sectors.

The committee, therefore, called on stakeholders to engage constructively with the implementation process, noting that administrative guidance, clarifications, and regulations will ensure the laws meet their economic development objectives.

The presidential committee response states: “We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws. We acknowledge that a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues. However, the majority of the publication reflected a misunderstanding of the policy intent, a mischaracterisation of deliberate policy choices, and, in several instances, repetitions and presentation of opinion and preferences as facts.

A significant proportion of the issues described as “errors,” “gaps,” or “omissions” by KPMG are either:

– the firm’s own errors and invalid conclusions,

– issues not properly understood by the firm,

– missed context on broader reforms objectives,

– areas where KPMG prefer different outcomes than the choices deliberately made in the new tax laws, and

– obvious clerical and editorial matters already identified internally.

While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps. KPMG would have been more effective if the firm adopted a similar approach like other professional firms who engaged directly providing the opportunity for clarifications and mutual-learning.

It is equally important to distinguish between policy choices designed to achieve the reform objectives and proposals that merely represent a firm’s preference.

Taxation of Shares and the Stock Market
Contrary to the presumption that the new tax provisions on chargeable gains would trigger a sell-off on the stock market, the fact is that the applicable tax rate on share gains is not a flat 30%. The tax framework is structured from 0% to a maximum of 30%, which is set to reduce to 25%. Furthermore, a significant majority of investors (99%) are entitled to unconditional exemption, with others qualifying subject to reinvestment.

The market’s performance, which is at an all-time high with increased investment flow, demonstrates investors understanding that the tax changes will enhance the fundamentals of firms both in terms of profitability and cash flows. The sell-off narrative is unsubstantiated as any disposals in December 2025 would have benefited from the re-investment exemption or enhanced deductions under the new law.

Commencement Date and Transition
The suggestion to set the commencement date as the start of an accounting period (e.g., 1 January 2026) takes a narrow view of the complex transition issues. A wholesale reform affects myriad issues beyond the accounting period, spanning multiple periods, different bases of assessment (preceding year, actual year), as well as issues related to audit, deductions, credits, and penalties. Limiting the commencement to a single date for accounting periods would fail to address the intricacies of continuous transactions and other transition matters. KPMG’s proposal is therefore not a “gold standard” to be applied to all new laws as suggested.

Indirect Transfer of Shares
The new provision to tax indirect transfer of shares is a policy choice aligned with global best practices and BEPS initiatives. Its objective is to block a long-exploited tax loophole by multinationals and other investors, not to affect competitiveness. This is a common provision in international tax, and the assertion that it may affect the country’s economic stability is disingenuous.

VAT Exemption on Insurance Premium
KPMG’s point regarding a specific VAT exemption on insurance premium is technically unnecessary, as an insurance premium is not a “taxable supply” defined under the Nigeria Tax Act. Insurance relates to risk transfer, not the supply of goods or services subject to VAT. As this has always been the administrative and legal position, a specific amendment for exemption is academic. If it is not broken, don’t fix it.

Inclusion of ‘Community’ in Definition
The concern about the inclusion of “community” in the definition of a ‘person’ but its omission from the charging section does not constitute a gap or ambiguity. In statutory interpretation, definitions provided in the law apply wherever the defined term appears, unless the context requires otherwise. Hence, ‘person’ and ‘taxable person’ are used in the charging section, and both definitions include ‘community.’ This approach is consistent with modern legislative drafting principles, which use comprehensive definitions to streamline operative provisions and avoid redundancy. This is similar to the inclusion of partnerships and executors in the definition but not under the charging section. The use of the word “includes” further signifies that the list of taxable persons is not exhaustive.

Joint Revenue Board (JRB) Composition
The composition and mandate of the Joint Revenue Board (JRB) are intentional. Its policy advisory role is specifically to provide a subnational tax and revenue perspective that complements the fiscal policy mandate of the Ministry of Finance. Its membership is appropriately limited to revenue-focused agencies, which is why it is called the Joint Revenue Board. This is a similar composition under which the former JTB operated effectively, and its functions remain consistent with the need for inter-agency coordination.

Distinction in Dividend Treatment
KPMG’s analysis appears to mix the distinction between a foreign-controlled company and a foreign operation of a Nigerian company. Dividends distributed by a foreign company cannot be “franked” since no Nigerian Withholding Tax (WHT) would have been deducted. Section 162(1)(s) confers exemption on dividend, interest, rent, or royalty derived from outside Nigeria and brought into Nigeria through approved channels. The choice to treat dividends distributed by Nigerian companies differently from foreign companies is a deliberate policy choice, as they are fundamentally different for tax purposes.

Non-Resident Registration and Final Tax
The view that a payment subject to deduction as final tax should automatically exempt the non-resident recipient from tax registration misses a critical distinction. While the law conditionally exempts passive income from registration, the deduction of tax on non-passive income is not synonymous with an exemption from registration or filing of returns. The same way that residents are required to file returns on income such as interest (in the case of individuals) and dividend where WHT is final. Returns serve a broader purpose beyond solely generating tax revenue.

Tax on Foreign Insurance Premiums
The proposal to exempt foreign insurance companies from tax on premiums from insurance written in Nigeria to deepen penetration, while local insurance companies continue to pay tax, would be detrimental to the domestic insurance sector. This would create an unfair and harmful competitive disadvantage for local firms in their own market. The current policy is designed to protect and promote local industry and ensure a level playing field.

Parallel Market Forex Deduction
The new law disallows tax deduction for the difference where a business buys foreign exchange in the parallel market at a premium over the official rate. This is a critical fiscal policy choice designed to complement monetary policy, strengthen, and stabilise the Naira. By removing the tax subsidy for patronage of the parallel market, the policy aims to reduce incentives for round-tripping and redirect legitimate FX demands to the official market. This is policy congruence, not an error.

VAT Compliance-Linked Deductibility
The non-tax deduction for taxable transactions on which VAT has not been charged is a necessary anti-avoidance measure. It removes the advantage that some taxpayers previously enjoyed by patronising suppliers who evade VAT. This is a matter of fairness and is squarely within the control of a business to manage, especially given the provision for the self-charge of VAT. It also ensures that responsible businesses play their part in promoting voluntary tax compliance across the ecosystem.

Progressive Personal Income Tax
While KPMG acknowledges the reform objective of fairness and progressivity, the firm disagrees with a top marginal tax rate of 25% for the highest earners. In reality, the effective tax rate can be as low as 22% for an individual earning billions a year simply by contributing 10% to pension. This rate is competitive when compared to many other countries, including Angola 25%, Egypt 27.5%, Ghana 35%, Kenya 35%, the U.S. (Federal) 37%, South Africa 45%, and the U.K. 45%. So, the rate is not “oppressive” or one that will negatively affect economic growth as claimed, rather it ensures progressivity without compromising competitiveness. From a broader policy objective perspective, the increase in top marginal rate for high income earners and the reduction in corporate tax rate is designed to address the existing higher tax burden associated with business formalisation.

Police Trust Fund
The Police Trust Fund was signed into law on May 24, 2019, with a six-year lifespan under section 2(2) of the Act, which ended in June 2025. Therefore, KPMG’s point that the new tax law should be amended to repeal the taxing section of the Police Trust Fund Act is needless, as the provision no longer exists.

Small Company Verification
The analysis concerning the tax exemptions for small companies affecting large companies’ obligations is not a new issue or an inconsistency in the new law. The small business threshold was introduced via the Finance Act 2021. This issue pre-dates the current tax laws and should not be presented as an error or omission simply by virtue of a higher tax exemption threshold under the new law.

While acknowledging the objectives of the reform, KPMG could have highlighted the major structural improvements under the new laws, including:

– simplification and tax harmonisation,

– the scope for reduction in corporate tax rate from 30% to 25%,

– expanded input VAT credits for businesses,

– tax exemption for low-income earners and small businesses,

– elimination of minimum tax on turnover and capital, and

– improved investment incentives for priority sectors.

A balanced assessment would have recognised these transformative elements, among others.

The tax reform is the result of an extensive consultation with various stakeholder groups in addition to the legislative process that included widely publicised public hearings, avenues intended for all stakeholders including international firms to provide technical expertise at the formative stage.

In any comprehensive overhaul of a nation’s tax framework, clerical inconsistencies or cross-referencing gaps may occur, and these are already being identified within the government. The tax reform represents a bold step toward a self-sustaining and competitive Nigeria.

An effective review needs to connect identified gaps to clear policy intents and the reality of modern-day tax systems within the context of economic development and global competitiveness.

At this stage, the effectiveness of the tax law depends on administrative guidance, clarifications from the tax authority, and regulations to complement precise statutory provisions where necessary pending future amendments.

We urge all stakeholders to pivot from a static critique to a dynamic engagement model, which allows for clarifications and a productive partnership in the implementation of the new tax laws.

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93 percent of inmates are State offenders, half don’t need jail — Tunji-Ojo

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29 minutes ago

July 16, 2026

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Minister of Interior, Dr Olubunmi Tunji-Ojo, has disclosed that 93 percent of inmates in Nigerian custodial facilities are state offenders, with only 7 percent held for federal offences, adding that a significant proportion of these inmates do not require incarceration in the first place.

Tunji-Ojo, who spoke on Wednesday in Abuja at the Regional Conference on the Classification of Prisoners and the Use of Technology in Prisons in Africa, jointly organised by the United Nations Office on Drugs and Crime UNODC and the African Correctional Services Association ACSA, said the Federal Government had moved decisively to decongest correctional facilities by targeting inmates jailed for minor offences.

“93% of our inmates in Nigeria are state offenders. Only 7% are federal offenders. And of this 93%, I want to tell you before this president came on board, a lot of them were for minor offences that had no need for incarceration,” the minister said.

He recounted how he ordered an audit of inmates held over minor fines and compensation judgments soon after assuming office.

“When I became minister, I called my permanent secretary, I called the Controller General of the Correctional Service, and I said, listen, give me the data, the record of people who are in correctional centres for fines and compensation of less than 500,000 or something. And guess what? Over 4,000 people,” he said.

According to him, the exercise exposed the futility of keeping such offenders in custody at public expense. “I said, what is the sense in this? Because I feed them in a year with more than 10 times of the fine. So how is the government benefiting? And we were able to clear that, and in one day, we decongested our correctional centre by 5% in one day. In one day,” he said.

The minister said the episode underscored a broader question that correctional authorities across Africa must confront: whether their facilities are rightly overcrowded. “The question is this. Is your correctional centre rightfully overcrowded? That is the question. You have to look at those particular offences. You will realise that more than 30, 40, 50 percent are offences that do not warrant incarceration,” he said.

Tunji-Ojo also disclosed that recidivism in Nigeria’s correctional centres had fallen sharply under the current administration, from about 13,000 cases annually in 2023 to 1,000 last year, a development he attributed to expanded access to education and vocational training for inmates. He said the correctional service currently has 62 inmates pursuing postgraduate studies, 261 in undergraduate programmes, 1,125 in formal education, 18 National Open University centres domiciled in correctional facilities, and 9,582 inmates enrolled in vocational and non-formal rehabilitation programmes.

He said Nigeria had also gone three years without recording a single jailbreak or attack on a correctional facility, a feat he linked to improved data management and inter-agency information sharing. He cited an incident in which an escaped inmate was rearrested after attempting to obtain a Nigerian passport using biometric data linked across security agencies. “Immediately he put his finger at the level of Nigeria immigration service to procure a passport. Immigration saw it immediately that he was an inmate. And immediately they reached out to correctional service and he was arrested right there,” he said.

The Controller General of the Nigerian Correctional Service, Sylvester Ndidi Nwakuche, said Nigeria has continued to modernise its correctional system through reforms anchored on the Nigerian Correctional Service Act, 2019.

He said effective prisoner classification has become a strategic tool for identifying inmates’ risks, protecting vulnerable prisoners, deploying resources efficiently and delivering targeted rehabilitation programmes.

Nwakuche added that integrating technology into correctional administration would enhance record management, improve information sharing and strengthen institutional accountability, stressing that no single correctional service possesses all the solutions to today’s security and rehabilitation challenges. “We have a unique opportunity to exchange ideas, share practical experiences and collectively develop solutions that will strengthen correctional systems across Africa,” he said.

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Corruption Charges: Ex-CCT Chairman Umar gets N100m bail as trial begins Oct 29

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39 minutes ago

July 16, 2026

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Six days after he was remanded in prison custody, a High Court of the Federal Capital Territory (FCT), sitting in Maitama, on Wednesday granted bail to the former chairman of the Code of Conduct Tribunal (CCT), Mr Danladi Umar, to the tune of N100 million.

The court, in a ruling delivered by Justice Peter Kekemeke, further directed the erstwhile CCT boss, who is facing a four-count corruption charge, to produce one surety in like sum.

According to the court, the surety must be an owner of a property located within the Federal Capital Territory (FCT), Abuja, who must depose to an affidavit of means.

Besides, the court ordered the defendant to surrender his international passport and not travel out of the country without permission.

The case was subsequently adjourned to October 29 for trial.

Umar was, on July 9, after being arraigned before the court by the Economic and Financial Crimes Commission (EFCC), remanded to Kuje prison.

The anti-graft agency said its investigations revealed that the defendant abused his official position by conferring an undue advantage on himself while he served as head of the tribunal.

He was alleged to have collected kickbacks totalling about N15.5 million from contractors.

The prosecution told the court that the defendant, in 2021, used his wife’s bank account to collect the sum of N5.5 million from a contractor engaged to paint the headquarters of the CCT in Abuja.

It was further alleged that on January 25, 2024, he also used his wife’s account to collect another N6 million from a contractor that handled the digitisation of the tribunal’s records.

Furthermore, the defendant was accused of directing a contractor to pay N2.43 million for his daughter’s tuition fee at Baze University, Abuja.

He was said to have committed offences punishable under Section 19 of the Corrupt Practices and Other Related Offences Act, 2000.

However, upon his arraignment, the embattled former CCT chairman pleaded not guilty to the allegations.

At the resumed proceedings on Wednesday, his legal team, led by Mr Sunday Edward, prayed the court to release him on bail pending the conclusion of the trial.

His bail application was anchored on Section 36(5) of the 1999 Constitution (as amended), as well as Sections 162 and 163 of the Administration of Criminal Justice Act (ACJA), 2015.

Even though the prosecution counsel, Mr Christopher Mshelia, opposed the bail request on the premise that the defendant had the capacity to influence some of the proposed witnesses, Justice Kekemeke dismissed the objection.

He held that nothing was adduced to establish that the defendant could interfere with an investigation that had already concluded, with all documentary evidence frontloaded before the court.

The court further set aside the prosecution’s claim that the defendant could commit another offence or evade trial.

It held that the charges contained bailable offences.

It will be recalled that the defendant, while in office as CCT Chairman, on January 23, 2019, issued a controversial ex parte order that led to the removal of a serving Chief Justice of Nigeria (CJN), Justice Walter Onnoghen.

Following the ex parte order, the late President Muhammadu Buhari, on January 25, swore in the next most senior jurist of the Supreme Court, Justice Tanko Muhammad, as Acting CJN.

Although Onnoghen later voluntarily resigned his position as CJN on April 4, Umar went ahead and convicted him on April 18, 2019, on the federal government’s allegation that he had failed to properly declare his assets as required by law.

He gave the federal government the go-ahead to confiscate all monies in five accounts belonging to the former CJN and also removed him as chairman of both the National Judicial Council (NJC) and the Federal Judicial Service Commission (FJSC).

In 2024, the Senate, citing alleged gross misconduct, removed Umar as chairman of the CCT.

President Tinubu has since appointed Mr Abdullahi Bello to head the tribunal.

Some of the counts in the charge against the former CCT chairman read:

“That you, Danladi Yakubu Umar, while serving as the Chairman of the Code of Conduct Tribunal and Chairman of the Code of Conduct Tribunal Tenders Board, on or about the 5th day of October, 2021, in Abuja, within the jurisdiction of this Honourable Court, did confer upon yourself a corrupt and unfair advantage by causing the sum of N5,500,000.00 (five million, five hundred thousand naira only) to be paid to your wife, Zulaihatu Danladi Umar, through her Keystone Bank Account No. 6031167105, by Kurchmives International Limited, a sub-contractor under the contract awarded by the Code of Conduct Tribunal to Momanaf Global Ventures Limited for internal and external painting of the headquarters of the Code of Conduct Tribunal, and thereby committed an offence contrary to Section 19 of the Corrupt Practices and Other Related Offences Act, 2000, and punishable under the same section.”

“That you, Danladi Yakubu Umar, while serving as the Chairman of the Code of Conduct Tribunal and Chairman of the Code of Conduct Tribunal Tenders Board, on or about the 25th day of January, 2024, in Abuja, within the jurisdiction of this Honourable Court, did confer upon yourself a corrupt and unfair advantage by causing the sum of N6,000,000.00 (six million naira only) to be paid to your wife, Zulaihatu Danladi Umar, through her Zenith Bank Account No. 2085458208, by Portal Realities Limited, a sister company of JTF Global Links Limited, a company which was awarded the contract for the digitalisation of the Code of Conduct Tribunal management records by the Code of Conduct Tribunal, and thereby committed an offence contrary to Section 19 of the Corrupt Practices and Other Related Offences Act, 2000, and punishable under the same section.”

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INEC portal submission completed before deadline, says LP

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41 minutes ago

July 16, 2026

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The Labour Party has dismissed reports alleging that it failed to upload the names of its presidential and vice-presidential candidates before the Independent National Electoral Commission’s nomination portal closed, insisting that it completed the process four days ahead of the deadline.

In a statement issued in Abuja on Wednesday, National Publicity Secretary, Ken Asogwa, described the reports as “patently false and misleading” and urged its members and supporters to disregard them.

Asogwa explained that it successfully uploaded the names of all its duly nominated presidential, vice-presidential and National Assembly candidates before the July 14 deadline set by INEC.

According to him, the names of the party’s presidential and vice-presidential candidates were uploaded on July 10, in compliance with the electoral umpire’s timetable and guidelines.

He said, “The Labour Party wishes to categorically state that it successfully completed the upload of the names of all its duly nominated candidates for the presidential and National Assembly elections ahead of the closure of the INEC nomination portal on 14th July, 2026.

“Our attention has been drawn to media reports in certain quarters alleging that the party failed to upload the names of its presidential and vice presidential candidates before the expiration of the INEC deadline.

“This claim is patently false, misleading, and exists only in the imagination of the purveyors of that fake news.

“For the avoidance of doubt, the Labour Party successfully uploaded the names of its presidential and vice presidential candidates on 10th July, 2026, four clear days before the close of the INEC nomination window on 14th July, 2026.

“The process was completed seamlessly and in full compliance with the commission’s guidelines.”

The party also faulted the media report, accusing the unnamed organisation that published it of failing to verify the claim with the party’s leadership.

“It is, however, disturbing that a media organisation would publish such a weighty and misleading report without making the slightest effort to verify the information with the leadership of the Labour Party, particularly when the story was purportedly sourced from an anonymous INEC official.

“This raises legitimate questions about the professional responsibility of the media organisation concerned and whether the publication was intended to serve some ulterior political objective rather than the public interest,” he stated.

Asogwa, however, expressed confidence that INEC’s publication of the final list of validly nominated candidates for the 2027 general elections would settle the matter.

He urged Nigerians to ignore the report, insisting it was a deliberate attempt to discredit it ahead of the elections.

“In any event, INEC has already published its timetable for the release of the final list of validly nominated candidates for the 2027 general elections.

“Once the commission makes the publication, Nigerians will clearly see the names of all duly nominated candidates of the various political parties, including those of the Labour Party, thereby putting this baseless misinformation to rest.

“We, therefore, urge our teeming members, supporters and the general public to disregard the fake report in its entirety.

“Those who have become unsettled by the renewed strength, growing acceptance and increasing momentum of the Labour Party should channel their energies into preparing for the electoral contest ahead rather than resorting to crude propaganda and discredited tactics.

“This latest attempt has collapsed under the weight of the facts, like a pack of cards,” the statement added.

The clarification comes amid heightened political activities as parties conclude the nomination of candidates for the 2027 general elections in line with INEC’s timetable.

The electoral body earlier fixed 6 p.m. on July 11 as the deadline for the upload of names for presidential, vice presidential and National Assembly candidates by respective parties, before extending the deadline to Tuesday, July 14.