KPMG Identifies 31 Problems in Nigeria's New Tax Laws, Provokes Rebuttal

KPMG Nigeria published a newsletter dated 9 January 2026 that, it said, “spotlighted 31 key issues in Nigeria's recently enacted tax laws, emphasizing ambiguities and inconsistencies that could impact taxpayers, businesses, and investors.” The newsletter prompted former Labour Party presidential candidate Peter Obi to post a statement on his official Twitter handle and for the Presidential Fiscal Policy and Tax Reform Committee at the State House to issue a formal response on January 10, 2026.

KPMG framed the review as focused on implementation and clarity rather than allegations of criminality, noting that “their review focuses on clarity and implementation challenges, not allegations of forgery.” The firm, represented in the newsletter by Wale Ajayi, Partner and Head, Tax, Regulatory and People Services, KPMG in West Africa, supplied several concrete examples to illustrate its concerns and urged post-enactment amendments where necessary. BusinessDay and other outlets reported KPMG warned unresolved items could undermine attainment of the reforms’ stated objectives.

KPMG’s publicly highlighted technical examples included three detailed points. The firm said Sections 3(b) and 3(c) of the Nigeria Tax Act, 2025 vaguely define “person” in a way that could capture communities such as community development associations, villages and towns and recommended clearer language or removal. KPMG also flagged Section 21(p), writing, “Section 21(p) 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.” On export treatment KPMG recommended: “The Second Schedule should be amended to expressly include the exemption status of entities within the export free zone. Further, NTA should be amended to include the treatment of profit arising from the provision of services to another FZ entity in the FZ. Clearly, this class of sales does not arise in the customs territory. However, the law needs to be clear as to whether the sales would qualify as exports.” KPMG materials also referenced treatment of foreign and local dividends among items for clarification.

The State House rebuttal, issued by the Presidential Fiscal Policy and Tax Reform Committee on January 10, 2026, acknowledged some useful observations on implementation risks and clerical cross-referencing but sharply disputed much of KPMG’s framing. The committee wrote, “A significant proportion of the issues described as ‘errors,’ ‘gaps,’ or ‘omissions’ by KPMG are either: the firm’s own errors and invalid conclusions, issues not properly understood by the firm, missed context on broader reforms objectives, areas where KPMG prefer different outcomes than the choices deliberately made in the new tax laws, and obvious clerical and editorial matters already identified internally.” The State House singled out “Small Company Verification” as item 14 and said that the small business threshold originates from the Finance Act 2021, not the 2025 laws, and listed structural improvements KPMG did not emphasize, including “the scope for reduction in corporate tax rate from 30% to 25%” and “expanded input VAT credits for businesses.”

Peter Obi used KPMG’s count to press for an immediate policy response. As quoted by Arise TV from his Twitter post, Obi said, “It is now undeniable that the tax laws have been fundamentally altered, and even a firm as esteemed as KPMG has pinpointed 31 critical problem areas, from drafting errors to glaring policy contradictions and administrative gaps. This revelation should prompt every responsible government to take immediate action.” He added, “We have hastily pursued collection without securing a consensus and imposed enforcement without providing adequate explanations,” and warned that Nigerians are “grappling with skyrocketing food prices, exorbitant transport costs, dwindling purchasing power, and escalating poverty levels.”

KPMG’s newsletter reiterated that the reforms are “transformational” and that post-enactment law improvement is normal, while the State House defended the laws as deliberate policy choices rather than drafting failures. The published exchanges leave open which of KPMG’s 31 items the Presidency will accept, clarify or amend; the full itemized list of 31 issues and any point-by-point government response remain the next substantive steps for businesses, investors and taxpayers seeking certainty under the Nigeria Tax Act, 2025.