KPMG flags multiple errors, gaps in new tax laws, seeks ‘urgent’ review

KPMG HQ

KPMG, a global network of professional services firms, says 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.

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.

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.

‘TAX REGISTRATION EXEMPTION NEEDED FOR NON-RESIDENT COMPANIES’

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.