KPMG: Nigerian Tax Reforms and the Future of Free Trade Zones: A Significant Policy Shift

The Nigerian Tax Reform Acts, 2025 represent a landmark in Nigeria’s fiscal landscape, consolidating multiple tax laws into a unified framework and signalling government intent to broaden the revenue base. Amongst the most consequential provisions are those relating to Free Trade Zones (FTZs), which have historically offered generous tax exemptions to attract investment.

Under the reforms, these exemptions are repealed and replaced by a 15% minimum tax. This shift has significant implications for Nigeria’s investment climate. While the government aims to create a more equitable and efficient tax system, there are concerns that curtailing FTZ incentives could deter foreign direct investment, slow industrialisation, and weaken Nigeria’s competitive position relative to peer markets.

In this publication, KPMG’s Deals Advisory / M&A (Tax) team provides a critical analysis of:

1. The policy rationale behind the FTZ reforms and what they mean for Nigeria’s fiscal trajectory;
2. The likely effects on investor behaviour, industrial growth, and employment creation;
3. The intersection between Nigeria’s FTZ regime and the African Continental Free Trade Area (AfCFTA), which seeks to build a unified market across the continent; and
4. Policy considerations to balance revenue generation with competitiveness and long-term economic growth.

This thought leadership piece is timely and essential reading for policymakers, investors, fund managers, and ecosystem actors seeking to understand the changing tax and investment environment in Nigeria.