KPMG, the global professional services firm, has raised serious concerns over Nigeria’s newly enacted tax legislation, warning that several errors, gaps, inconsistencies and omissions could undermine the reform’s objectives if not urgently addressed. The firm highlighted these issues in a recent newsletter analysing the New Tax Act (NTA) 2025 and related taxation laws, stressing the need for prompt government review and clarification to ensure effective implementation.
According to KPMG’s review, key provisions of the tax laws contain drafting oversights that could create uncertainty and compliance challenges for taxpayers and the government alike. One notable gap is in the definition of taxable entities: while the law’s general definition of “person” includes communities, the specific list of taxable persons in the NTA omits this category, opening the door to confusion over whether communities are subject to tax or exempt.
The advisory firm also pointed to potential double taxation under rules for controlled foreign companies, where undistributed foreign profits could be treated as distributed and included in taxable profits, potentially exposing companies to income tax without clear guidelines on dividend treatment. In addition, KPMG says that registration and filing requirements for non-resident companies lack clarity, particularly where income is already subject to final withholding tax, calling for realignment to avoid unnecessary compliance burdens.
Other technical concerns raised include restrictive rules on foreign exchange expense deductions, ambiguous treatment of capital losses, and limited personal tax relief provisions that some experts say may not fairly balance taxpayer obligations. KPMG urged that these and other flagged issues be reviewed and amended to safeguard investment, protect tax fairness, and support sustainable economic growth in Nigeria’s evolving fiscal landscape.
