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Nigeria’s move to implement the new National Tax Act, NTA, which took effect on January 1, 2026, has been fraught with controversy and opposition right from its mooting.
Laws are envisaged to be inclusive and generate goodwill, but the has not been the case with the NTA which some have mischievously dubbed Tinubu Tax Law.
Designed as a piece of legislation that will bring sweeping tax overhaul in decades, but is steeped in legislative integrity deficit and stakeholders’ scrutiny as wanting in many respects.
Last week, KPMG, a global network of professional services firms, flagged the Act as filled with “errors, inconsistencies, gaps, omissions, and lacunae.”
The accounting firm said the new tax laws require urgent reconsideration to ensure the achievement of their stated objectives.
In its newsletter, the professional services firm outlined several areas where revisions are required following a review of the New Tax Act, NTA, 2025.
KPMG said Section 3(b) and (c) of the NTA specifies persons on whom taxes may be imposed but omits the term ‘community’, despite its inclusion in the definition of a ‘person’.
The firm recommended that communities should be explicitly included or exempted for tax purposes to avoid ambiguity.
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The professional services firm also said Section 6(2) of the NTA, which addresses controlled foreign companies, may result in double taxation, advising that amendments should clarify the treatment of foreign and local dividends.
According to KPMG, the Act states that undistributed foreign profits are to be “construed as distributed” while also requiring such profits to be “included in the profits of the Nigerian company”, implying income tax at 30 percent.
KPMG said Section 6(1) of the Nigeria Tax Administration Act (NTAA), 2025, should be amended to exempt non-resident companies whose income is subject to final tax deduction at source from tax registration.
This, the firm said, would align with Section 11(3) of the NTAA, which already exempts such companies from filing tax returns.
On withholding tax (WHT), KPMG said Section 17(3)(c) of the NTA should be amended to exempt insurance premiums paid to non-residents, arguing that the current requirement for Nigerian residents to deduct WHT discourages economic growth and competitiveness.
The firm also advised removing the condition in Section 20(4) of the NTA that limits foreign exchange expense deductions to Central Bank of Nigeria (CBN) rates.
Instead, it suggested focusing on improving liquidity and strengthening reporting requirements.
In addition, the organisation recommended expunging Section 21(p) of the NTA, proposing that expenses should be tax-deductible if incurred wholly and exclusively for business purposes, regardless of unpaid value-added tax (VAT).
For capital losses, the firm suggested modifying Section 27 of the NTA to clearly specify how such losses should be deducted, noting that the current provision lacks clarity.
These are just some of the many issues the KPMG identified in the NTA.
Expectedly, the Federal Government through the Presidential Fiscal Policy and Tax Reforms Committee firmly rejected the key observations by KPMG, describing much of the firm’s assessment as a misunderstanding of policy intent and a misrepresentation of deliberate reform choices.
The Federal Government acknowledged that a few points raised by KPMG, particularly on implementation risks and clerical or cross-referencing issues, were useful.
But maintained that the bulk of the commentary framed policy disagreements as errors and presented preferences as facts.
The Presidency noted that many issues labelled by KPMG as “errors,” “gaps,” or “omissions” stemmed from incorrect conclusions, lack of contextual understanding of broader reform objectives, or areas where the firm simply preferred alternative policy outcomes.
It is disturbing that if a global firm like KPMG does not understand the NTA as alluded to by the Presidency, then how can ordinary Nigerians come to terms with the legislation?
The Abuja Inquirer reiterates that for a country fatigued by economic shocks, from subsidy removal to currency floatation the FG should apply the brakes and address the misgivings including correction of the “clerical erros.”
As it is now, there is little clarity and trust must become the government’s most urgent priorities.
