KPMG Sounds Alarm Over Flaws in Nigeria’s New Tax Laws — Calls for Immediate Fixes

Nigeria’s ambitious new tax reform — designed to modernize the country’s tax system and boost revenue — may be hitting some serious bumps in the road. Global advisory giant KPMG has raised red flags about multiple “errors, inconsistencies, gaps and omissions” in the recently enacted tax legislation, urging lawmakers to revisit the laws urgently before they derail key economic goals. 

In a recently published newsletter analysing the Nigeria Tax Act (NTA) 2025 and related tax laws, KPMG warned that several provisions are unclear or contradictory, with the potential to:
Create ambiguity over who must pay tax — the Act lists taxable persons but curiously omits the word “community” even though it’s defined elsewhere. 
Lead to double taxation on foreign-sourced profits by treating undistributed foreign profits as both distributed and taxable at income tax rates. 
Confuse non-resident companies on registration and filing obligations, despite existing rules that exempt them when final taxes are deducted at source. 
Discourage investment through conflicting treatment of foreign dividends, withholding tax on insurance premiums, and limits on deducting foreign exchange costs.

“There are certain errors, inconsistencies, gaps, omissions, and lacunae in the new tax laws that need to be urgently reconsidered to ensure the attainment of the stated objectives,” KPMG said. 
Legit.ng - Nigeria news.

KPMG didn’t dismiss the potential of the new tax framework — in fact, it acknowledged the reforms could boost revenue and simplify tax administration. However, without swift corrections, the firm warned the laws could actually undermine compliance, deter foreign investment, and dampen economic growth. 

Among specific areas needing attention are:
Tax deductions and credits — strict limits tied to the Central Bank of Nigeria (CBN) rate could unfairly penalize businesses navigating real-world foreign exchange shortages. 

Capital losses and personal reliefs — unclear rules on how losses are deducted and minimal personal allowances could overburden individual taxpayers. 

Sector-specific concerns — unclear treatments of indirect transfers and free trade zones may impact investment decisions. 

KPMG’s message is clear: urgent legislative refinement is needed to ensure the tax laws work as intended and aren’t more trouble than they’re worth. The firm also urged businesses to:
Conduct thorough impact analyses,
Train staff on the new provisions,
Align reporting systems (like ERP and payroll), and prepare comprehensive documentation. 

Without action, Nigeria risks over-taxed citizens, confused businesses, and a less attractive environment for investors — the very opposite of the goals that inspired the 2025 tax overhaul.

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