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 Organisation of the Petroleum Exporting Countries (OPEC) on Wednesday lowered its forecast for global oil demand growth in 2026 due to the Iran war.
According to the cartel, world oil demand will rise by 1.17 million barrels per day in 2026, down from the previous 1.38 million barrels per day.
OPEC said consumption would rebound later and raised its demand growth forecast for 2027. For next year, it expects oil demand to rise by 1.54 million barrels per day, up 200,000 barrels per day from the previous forecast.
OPEC joins other forecasters, such as the International Energy Agency (IEA), in cutting expectations due to the war that started in February.
The producer group sees a smaller hit to demand than the IEA, which earlier on Wednesday increased its estimate of the decline in oil use this year.
The IEA sees demand falling by 420,000 barrels per day this year, compared with a previous forecast of an 80,000 barrels per day drop. Overall, global oil supply will fall by around 3.9 million barrels per day across 2026 due to the war, slashing its previous forecast, which had projected a 1.5 million barrels per day drop.
The war has effectively closed the Strait of Hormuz, a key global oil route, curbing millions of barrels of Middle East output and sending fuel prices soaring. The surge is hitting consumers and businesses, and prompting government steps to conserve supplies.
“The global economic growth continues to show resilience for this year despite geopolitical tensions, particularly in the Middle East,” OPEC said, leaving its economic growth forecasts unchanged.
Global oil demand is expected to average 104.57 million barrels per day in the second quarter, down from the 105.07 million barrels per day forecast last month, OPEC said. The previous report had already cut the second-quarter estimate by 500,000 barrels per day.
The wider OPEC+, which groups the OPEC and allies such as Russia, had agreed to resume output increases from April, but the closure of Hormuz has made it impossible to deliver on the deal. The report said output fell further in April.
OPEC+ crude output averaged 33.19 million barrels per day in April, down 1.74 million barrels per day from March, the report said, citing secondary sources OPEC uses to monitor its production.
The April figure includes the United Arab Emirates (UAE), which left OPEC on May 1.
By Adedapo Adesanya
President Bola Tinubu has said that Nigeria would continue to borrow responsibly amid rising concerns about the country’s swelling debt profile.
According to a statement by presidential spokesperson, Mr Bayo Onanuga, President Tinubu made the remarks on Tuesday while leading Nigeria’s government, diplomatic, and business delegation to the Africa Forward Summit at the Kenyatta Convention Centre in Nairobi.
Mr Tinubu noted that the debt to be repaid in the year is nearly half of the projected revenue, at about $11.6 billion.
“Every single dollar that leaves our treasury to pay punitive interest rates is a Dollar that did not go into our steel sector, our textile mills, our agro-processing plants, or our digital industries. It is a dollar that did not train a young Nigerian engineer or provide affordable power for our factories.
“Our industrial base is being starved of the blood it needs — long-term, affordable finance — while creditors and rating agencies treat African sovereigns as permanent high-risk borrowers, regardless of our fiscal performance.
“So, I ask this gathering: how can an African manufacturer compete with a competitor in Europe, Asia, or North America when the cost of borrowing in our nations is five to ten times higher? How can we build cross-border industrial value chains under the African Continental Free Trade Area when our infrastructure projects face a financing gap deepened by the very institutions meant to bridge it? The answer is plain: we cannot. The international financial architecture, as currently constituted, is an instrument of industrial disarmament for Africa.”
He emphasised that Nigeria is not asking for charity, adding that the country will have to borrow, albeit responsibly.
“We are demanding a financial system that intentionally enables Africa to industrialise — to process its own minerals, refine its own crude oil, manufacture its own pharmaceuticals, and compete fairly in global markets.
“We will continue to borrow responsibly, but we insist that our creditworthiness be measured by our economic fundamentals and our industrial potential, not by outdated stereotypes,” he noted.
He called for deeper economic integration across Africa, stressing the need for policies that prioritise the continent’s industrial growth and prosperity.
Mr Tinubu highlighted Nigeria’s blue economy potential as a key driver of Africa’s development, noting that it had long been underutilised due to insecurity and uncertainty.
“Today, I make an explicit commitment: Nigeria will intensify regional coordination by offering our Deep Blue Project’s maritime intelligence infrastructure as a shared data hub for willing Gulf of Guinea states. Interoperable systems, harmonised laws, and seamless joint enforcement must become the daily reality, not an aspiration on paper.
“Let no one misunderstand: maritime sovereignty does not repel investment — it attracts it. Secure sea lanes, predictable regulation, and functional courts are the preconditions that unlock private capital. Governance has de-risked Nigeria’s maritime proposition. We now invite partners to build on these gains as we advance climate-aligned port modernisation and the digital transformation of our maritime sector.
“As we endorse the Nairobi Declaration, Nigeria affirms that maritime sovereignty and ocean governance are the non-negotiable foundations of Africa’s Blue Economy transformation. We will continue to earn that sovereignty — through institutions, through assets, through law, and through iron-clad regional solidarity that turns our waters from a theatre of risk into a story of shared resilience.
“The oceans have no duplicate as a common heritage of mankind. For Africa, moving from sea blindness to ocean sovereignty is not a choice — it is a generational duty. Nigeria is ready, and we invite all present to join us in that duty,” the President stated.
By Adedapo Adesanya
An estimated 1.66 billion litres of refined petroleum products were exported by Dangote Petroleum Refinery in April 2026, amid continued tensions in the Middle East and fears of possible disruption to global fuel supply routes following the growing conflict involving the United States and Iran.
According to the latest data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), the country exported about 513 million litres of Premium Motor Spirit (PMS), popularly called petrol; 534 million litres of Automotive Gas Oil (AGO), also known as diesel; and 615 million litres of aviation fuel within the month under review.
The Dangote refinery is the only major functional refinery in Nigeria that currently produces enough refined petroleum products for both local consumption and export.
This is the first month the refinery has exported such a high volume of petroleum products, especially jet fuel and diesel, indicating the significance of the 650,000-barrel-per-day plant.
The combined export volume translates to approximately 55.4 million litres daily. The development comes as the international oil market faces fresh uncertainty over the security of the Strait of Hormuz, a critical global oil shipping route, following the failure of the United States and Iran to agree on a peace deal.
The NMDPRA document showed that local refineries operated at an average capacity utilisation of 99.12 per cent in April, with the Dangote refinery accounting for the lion’s share of production.
The downstream regulator stated that the refinery achieved 100 per cent capacity utilisation “for most of the days in April.” The report also indicated that domestic refineries received 18.37 million barrels of crude oil in April, up from 13.11 million barrels recorded in March.
Findings further showed that the refinery maintained strong export momentum despite increased domestic supply obligations.
According to the April fact sheet, average daily petrol production stood at 53.6 million litres, while 40.7 million litres were supplied locally and 17.1 million litres were exported daily.
Similarly, diesel production averaged 23.6 million litres daily, with exports accounting for 17.8 million litres per day, more than double the domestic supply volume of 8 million litres daily. For aviation fuel, exports stood at 20.5 million litres daily, compared to the domestic supply of 2.6 million litres per day.
The strong aviation fuel export performance comes weeks after reports emerged that domestic airline operators threatened to shut down over the rising cost of the fuel.
There are reports that Nigeria has become a net petrol exporter for the first time in decades due to rising output from the Dangote refinery. The refinery had earlier exported about 434 million litres of petrol in March after domestic production exceeded local consumption levels.
The latest figures underscore Nigeria’s gradual transition from a major importer of refined petroleum products to an export hub within Africa. It was observed that jet fuel exports may rise further if instability in the Middle East continues to disrupt traditional supply chains serving Europe and other regions.
The Middle East accounts for a substantial share of global aviation fuel exports, with the Strait of Hormuz serving as a strategic transit corridor for crude oil and refined petroleum products. The prolonged disruption in the region has tightened global fuel supply and pushed up prices internationally.
The NMDPRA report also revealed that Nigerians consumed an average of 51.1 million litres of petrol daily in April, slightly above the 50 million litres benchmark estimated by the regulator. Diesel consumption stood at 17.3 million litres daily, while aviation fuel consumption averaged 2.5 million litres per day.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism10 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn