Economy
KPMG Identifies Inherent Errors, Inconsistencies, Others in Nigeria’s New Tax Laws
By Aduragbemi Omiyale
The Nigerian arm of global consultancy firm, KPMG, has highlighted some inherent errors, inconsistencies, gaps and omissions in the country’s new tax laws.
In a report on its website, analysed by Business Post, KPMG Nigeria charged the local authorities to address these issues to boost investor confidence.
It noted that while the new tax laws would result in increased revenue for the government, there is always the need to strike a delicate balance between revenue generation and sustainable growth.
“It is, therefore, critical that government review the gaps, omissions, inconsistencies and lacunae highlighted in this newsletter to ensure the attainment of the desired objectives. Government must also seek international cooperation and collaboration to facilitate the sharing of information, build capacity and capability of tax administration in the country,” it said.
Analysing an error in Section 3(b) and (c) of the Nigeria Tax Act (NTA), which dwells on the imposition of tax, the agency said the section specifies persons on whom taxes should be levied, including individuals, families, companies or enterprises, trustees, and an estate, but omits community, which is included in the definition of person under Section 201.
It recommended that, “If the intention is to impose tax on communities, this should be explicitly introduced in Section 3. Otherwise, the law should clearly state that communities are now exempt from tax.
It also pointed out that Section 6(2) of the NTA on Controlled Foreign Companies (CFC), the Act states that undistributed foreign profits are to be “construed as distributed” but also mandates that they be “included in the profits of the Nigerian company” (implying income tax at 30 per cent).
Though dividend distributed by a Nigerian company is deemed to be franked investment income, this does not appear to be the case with dividends distributed by foreign companies.
It thus appears that such dividends will be taxed at the income tax rate. Consequently, there will be differences in the treatment of dividends distributed by Nigerian companies and those distributed by foreign companies.
KPMG Nigeria advised the government to “modify the section by providing clarity on the treatment of foreign and local dividends.”
On Section 20(4) of the NTA focusing on deductions allowed, it states that expenses incurred in a currency other than the Naira may only be deducted to the extent of its Naira equivalent at the official exchange rate published by the Central Bank of Nigeria (CBN).
This implies that where a business buys forex at a rate that is higher than the official rate, such company cannot claim tax deduction for the difference in value between the official and the other rates.
The intention is to discourage speculative foreign exchange transactions and encourage the appreciation of the Naira. However, issues surrounding the accessibility of all forex needs due to supply problems have not been fully considered.
It recommended that, “We do not think that this condition is necessary at this time. With the current state of the economy, focus should be on improving liquidity and introducing stricter reporting requirements to track and monitor foreign exchange transactions.”
As for the next section, which dwells on deductions not allowed, it includes expenses on which VAT has not been charged. This means that such expenses will not be considered allowable tax deductions even when those expenses have been validly incurred for business purposes.
This implies that a company could be held accountable for any inaction or non-performance by its suppliers or service providers. While the defaulting service providers may eventually be required to pay the VAT during an audit or investigation, the company will have already been denied the ability to claim a deduction for the related expense.
It called for the removal of this section, saying “the only criteria should be that any expense that is wholly and exclusively incurred for business purposes should be allowable for tax purposes.”
Other sections it found errors in include Section 17(3)(c) of the NTA on taxation of non-resident persons, Section 27 of the NTA on the ascertainment of total profits of companies, Section 30 of the NTA on the ascertainment of chargeable income of an individual, Sections 39 and 40 of the NTA on computation of chargeable gains, Section 47 of the NTA on indirect transfer of ownership of companies or assets, Section 63(4) / 162(b) of the NTA on collective investment scheme, amongst others.
By Adedapo Adesanya
The Governor of the Central Bank of Nigeria (CBN), Mr Yemi Cardoso, has wooed American investors, declaring that the country will focus on disciplined reforms and transparent markets to restore investor confidence in the country.
Mr Cardoso disclosed this after leading Nigeria’s engagement with senior business leaders and global investors at the US-Nigeria Executive Business Roundtable in Washington, convened by the US Chamber of Commerce’s US–Africa Business Center.
According to him, Nigeria used the platform to send a clear message to international capital: the country is focused on macroeconomic stability, regulatory clarity, and private sector-led growth.
“With global capital cautious and highly selective, we presented Nigeria’s message clearly and practically: disciplined reform, transparent markets, and credible institutions,” the CBN Governor said.
He noted that discussions at the roundtable centred on stabilising the macroeconomic environment and strengthening the financial system to support sustainable business expansion.
“Our discussions focused on macroeconomic stabilisation, regulatory clarity, and fostering private sector-led growth, laying the groundwork for a deeper phase of US–Nigeria commercial engagement,” Mr Cardoso stated.
Looking ahead to 2026, the CBN chief outlined an ambitious reform agenda aimed at reinforcing Nigeria’s financial architecture and improving the operating environment for businesses and investors.
“We will continue to strengthen the banking system through rigorous supervision and sound governance,” he said, adding that the apex bank would also “refine our inflation-targeting framework to deliver durable price stability.”
Mr Cardoso disclosed plans to modernise Nigeria’s payments infrastructure to boost efficiency and financial inclusion, while also promoting responsible fintech innovation anchored on consumer protection and financial integrity.
He further revealed that the CBN would deploy data and artificial intelligence-enabled tools to enhance regulatory responsiveness and execution.
“We will continue to build institutional capacity within the Bank, leveraging data and AI-enabled tools to support faster, more responsive, and higher-quality execution,” he said.
The central banker stressed that sustained reform, rather than short-term measures, remains critical to unlocking long-term growth and investment.
“Reform is a process that rewards consistency and discipline. Our focus remains steady: to protect trust, sustain stability, and entrench the foundations for disciplined, lasting economic growth in Nigeria,” he added.
He noted that the engagements signalled growing international confidence in Nigeria’s reform trajectory, positioning the country for deeper commercial ties with the United States and renewed inflows of global capital in the year ahead.
By Aduragbemi Omiyale
Nigerians have been urged to invest more locally because the country has now become a compelling investment destination, where value is being created and discovered.
This is the view of President Bola Tinubu, who expressed confidence that 2026 would deliver even stronger returns as the impact of his administration’s economic reforms continues to materialise.
He was reacting to the historic N100 trillion market capitalisation mark of the Nigerian Exchange (NGX) Limited achieved on Monday, describing the feat as a powerful signal of renewed investor confidence and economic rejuvenation.
In a statement, the President said, “With Nigerian Exchange crossing the historic N100 trillion market capitalisation mark, the country is witnessing the birth of a new economic reality and rejuvenation,” noting that the All-Share Index (ASI) closed 2025 with a 51.19 epr cent return, up from 37.65 per cent in 2024, ranking among the strongest performances globally and outperforming major indices including the S&P 500, FTSE 100, and several emerging-market peers.
“Nigeria is no longer a frontier market to be overlooked, it is now a compelling investment destination where value is being created and discovered,” he declared.
Mr Tinubu emphasised that robust stock market performance reflects broader economic health and rising investor confidence, highlighting several factors behind the market’s strong performance: impressive results across listed companies, a growing pipeline of new listings spanning energy, technology, telecommunications, and infrastructure, as well as broader macroeconomic improvements including easing inflation, a stabilising naira, rising foreign reserves, and expanding exports.
He reiterated his administration’s commitment to building an inclusive, transparent, and high-growth economy, stressing that the N100 trillion milestone sends a powerful message to the global investment community.
“Nation-building is a process, not a destination. The N100 trillion market capitalisation is a signal to the world that the Nigerian economy is robust, productive, and open for business,” Mr Tinubn affirmed.
In his remarks, the Director-General of the Securities and Exchange Commission (SEC), Mr Emomotimi Agama, credited President Tinubu’s leadership for driving the market to historic heights.
“The N100 trillion milestone is a direct result of the administration’s decisive reforms and unwavering commitment to transparency and fiscal discipline.
“These policies have renewed investor trust and solidified the credibility of Nigeria’s capital market,” Mr Agama stated, reaffirming the agency’s alignment with the President’s economic vision, pledging to strengthen oversight, protect investors, and uphold governance standards to ensure sustained growth and resilience.
On his part, the chief executive of NGX Group Plc, Mr Temi Popoola, commended President Tinubu for providing the policy clarity and reform momentum that have bolstered investor confidence.
“This milestone underscores the success of ongoing reforms and the exchange’s commitment to market depth, transparency, and inclusive growth. The capital market has responded positively to improved macroeconomic coordination and clear reform direction, creating an enabling environment for sustainable investment. It validates our focus on market development, innovation, and creating an environment where both local and global investors can deploy capital with confidence,” Mr Popoola noted.
He added that NGX Group would continue collaborating with regulators and stakeholders to attract quality listings, deepen liquidity, and expand retail participation, reinforcing our position as a catalyst for sustainable economic growth.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange appreciated for the fourth straight session on Thursday, January 8, chalking up 0.21 per cent.
This improved the market capitalisation of the bourse by N4.69 billion to N2.190 trillion from the N2.185 trillion it ended in the preceding session, and the NASD Unlisted Security Index (NSI) added 7.83 points to close at 3,660.87 points compared with Wednesday’s 3,653.04 points.
Business Post observed that there were movements around five securities during the trading day, with three pointing north and two point south.
FrieslandCampina Wamco Nigeria Plc gained N2.55 to close at N62.47 per share versus Wednesday’s price of N59.92 per share, Central Securities Clearing System (CSCS) Plc appreciated by 48 Kobo to N42.62 per unit from N42.14 per unit, and IPWA Plc improved by 10 Kobo to N1.12 per share from the N1.02 per share it ended at midweek.
On the flip side, Afriland Properties Plc lost N1.81 to end at N16.30 per unit versus the previous day’s value of N18.11 per unit, and Geo-Fluids Plc crashed by 6 Kobo to quote at N6.82 per share versus N6.88 per share.
During the session, the volume of transactions was down by 74.0 per cent to 486,499 units from 1.9 million units, the value of trades slumped by 70.9 per cent to N10.5 million from N36.3 million, and the number of deals went down by 46.7 per cent to 24 deals from 45 deals.
At the close of business, CSCS Plc remained the most active stock by value on a year-to-date basis with 1.1 million units sold for N42.7 million, followed by Geo-Fluids Plc with 2.9 million units valued at N20.3 million, and FrieslandCampina Wamco Nigeria Plc with 217,757 units worth N13.1 million.
The most active stock by volume on a year-to-date basis was Geo-Fluids Plc with 2.9 million units valued at N20.3 million, trailed by Industrial and General Insurance (IGI) Plc followed with 2.9 million units traded for N1.9 million, and CSCS Plc with 1.1 million units worth N42.7 million.
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