Auditors urged to prioritise tax compliance for enhanced corporate governance

To strengthen corporate governance among listed firms, audit committee members have been urged to ensure a well-defined tax policy and strategy that aligns with the evolving tax landscape.

At the KPMG Audit Committee Seminar for Shareholders, Partner, Tax Regulatory and People Service at KPMG West Africa, Oludayo Adeniji, emphasized the need for improved governance and control in corporate organisations and financial institutions.

Speaking on the theme ‘Tax Reform Bills in Nigeria: Implication for Audit Committees’, Adeniji highlighted said tax should be elevated as a key risk management area, with periodic reporting to the board to enhance oversight.

He urged audit committees to equip tax functions with the necessary expertise, tools and technology to effectively navigate the changing regulatory environment.

He further stressed the importance of enforcing regular reporting on a company’s tax status to the board and promoting responsible tax practices as crucial steps in strengthening corporate governance.

On Nigeria’s tax reforms, he noted, the Nigeria Tax Administration Bill (NTAB) aims to unify tax administration procedures for greater efficiency and compliance.

Also, the Nigerian Revenue Service (NRS) Bill establishes a dedicated agency for tax collection and revenue accountability at the federal level.

Discussing the Nigeria tax reform bills (NTRB), he revealed that the proposed tax rates include a zero per cent rate for small companies and a 27.5 per cent rate for other companies in 2025, dropping to 25 per cent in 2026.

However, he added that the Nigerian Governors’ Forum (NGF) has opted to delay any immediate changes.

Adeniji also pointed out that the NTB introduces full taxation on trading activities within customs territory exceeding 25 per cent and proportionate taxation for less than 100 per cent of exports by approved entities in Free Trade Zones.

He said: “The objective of the Nigeria Tax Administration Bill (NTAB) is to provide uniform procedures for a consistent and efficient administration of tax laws to facilitate tax compliance and optimise tax revenue.

“This objective of the NTB is to provide a unified fiscal legislation governing taxation in Nigeria. The Nigerian Revenue Service (NRS) Bill establishes the NRS as the agency responsible for assessing, collecting, and accounting for government revenue at the federal level.”

With these reforms, the role of audit committees in ensuring tax compliance and governance has become more critical than ever.