Global audit giant KPMG dropped a bombshell report exposing critical errors, gaps, and inconsistencies in Nigeria's shiny new tax laws that kicked in January 1, 2026, warning they risk choking compliance and revenue goals from day one.
The Nigeria Tax Act (NTA) and Nigeria Tax Administration Act (NTAA) boast reform hype, but KPMG slams sloppy drafting that leaves taxpayers – from multinationals to local hustlers – guessing on everything from community taxes to forex deductions.
Section 3(b)&(c) of the NTA lists who pays up – individuals, families, companies, trustees, estates – but ghosts "community" despite defining it as a "person" later, sparking chaos over village levies or exemptions. KPMG demands lawmakers spell it out: tax communities explicitly or carve them free, averting court pile-ups in rural Naija.
Section 6(2) NTA slaps foreign dividends at full income tax whack while locals skate lighter, a blatant mismatch that hammers investors routing profits home via offshore plays. Auditors cry foul on the unequal bite, urging equal treatment to lure FDI back amid naira woes.
Expenses minus VAT input stay non-deductible under Section 21 NTA, but insurance premiums – pure risk cover, not services – get wrongly lumped in, bloating bills for risk managers everywhere. KPMG pushes Part IV tweaks to exempt them outright, aligning with FIRS circulars on financial shields.
Businesses snagging premium parallel-market dollars over CBN rates eat the full loss with zero tax shield, a punitive jab meant to kill speculation but blind to forex famine realities. Report calls for ditching this hurdle to boost liquidity without rewarding randos.
Tax Reforms boss Taiwo Oyedele clapped back at KPMG's hit list as mostly misreads of deliberate policy muscle, welcoming tweaks on clerical slips but defending the overhaul's revenue punch. With National Assembly "certified" Acts pending, businesses hold breath for fixes before 2026 filings turn litigious.