The Federal Executive Council, the highest Executive decision making organ in Nigeria just approved a new National Tax Policy for the country. The policy will now be endorsed by the National Economic Council to recognize the Federal System of Government given the application of the policy to all tiers of government.
The National Tax Policy (NTP) establishes fundamental principles to guide an orderly development of the Nigeria tax system and reinforces the need for tax laws and administrative practices to promote economic development.
When fully implemented, the policy should address key challenges confronting the Nigeria tax system including:
Low tax to GDP ratio
Fragmented database of taxpayers and weak structure for exchange of information
Multiplicity of taxes and revenue agencies
Poor accountability for tax revenue
Use of aggressive and unorthodox methods of tax collection
Failure by tax authorities to honour refund obligations to taxpayers
The non-regular review of tax legislation which has led to obsolete laws that do not reflect
Current economic realities
Some of the key recommendations include to address the challenges include:
Ensuring that there is only one revenue agency per level of government
Establishment of a tax court as an independent body to adjudicate in tax matters
Lower tax rate and VAT compliance threshold for SMEs
Establishment of an Office of Tax Simplification for continuous improvement to tax legislation and administration and develop Key Performance Indices for Nigeria to attain a top 50 position on the global index of ease of paying taxes by 2020 and consistently improve on the ranking
Administrative framework for amnesty and whistle blowing as part of the strategies for curbing evasion and widening the tax net
INEC to mandate political parties to articulate, prepare, provide and make public their tax agenda before and during election campaigns.
The approved policy also contains and appendix of changes required to existing laws, repeals and new enactments.
Internal Control over Financial Reporting (ICFR) is a fundamental component of sound corporate governance for Public Interest Entities (PIEs). It provides reasonable assurance that financial transactions are accurately recorded, authorized, and reported in accordance with applicable accounting standards and regulatory requirements. By embedding effective preventive and detective controls throughout financial processes, ICFR strengthens the integrity, completeness, and accuracy of financial statements, thereby reducing the risk of material misstatements arising from error or fraud.
Driving Investor Confidence and Stakeholder Trust
Reliable financial reporting is critical to maintaining the confidence of investors, regulators, creditors, and other stakeholders. An effective ICFR framework demonstrates management's commitment to transparency, accountability, and financial discipline. This enhances the credibility of published financial information, supports informed decision-making by capital market participants, and reinforces the reputation of PIEs as responsible stewards of public and shareholder resources
Mitigating Regulatory and Compliance Risk
Given the heightened regulatory oversight applicable to Public Interest Entities, robust ICFR plays a vital role in ensuring compliance with financial reporting obligations and governance requirements. Well-designed and effectively operating controls enable organizations to identify and address deficiencies proactively, reduce the likelihood of regulatory breaches, financial penalties, and reputational damage, and support timely remediation where control weaknesses are identified. Ultimately, a strong ICFR framework promotes operational resilience, strengthens governance, and contributes to the long-term sustainability of the organization.
Navigating Nigeria's ICFR Requirements
The Financial Reporting Council (FRC) of Nigeria issued the Guidance on Management Report on Internal Control over Financial Reporting (ICFR) in November 2022, pursuant to Section 7(2)(f) of the Financial Reporting Council of Nigeria Act, 2011 (as amended). The Guidance introduced mandatory annual management assessment and reporting on the effectiveness of Internal Control over Financial Reporting for Public Interest Entities (PIEs), with independent auditor attestation.
Category
Mandatory ICFR Reporting Timeline
Public Companies
Effective for annual reports beginning 31 December 2023
Other Public Interest Entities (Private PIEs)
Effective for annual reports ending on or after 31 December 2024
Government/Public Sector Agencies
Originally effective for 31 December 2024, with a one-year waiver granted by the FRC. Mandatory submission now applies to 2025 audited financial statements filed in 2026.
How PML Professional Services Supports Your Organization
PML Professional Services provides end-to-end ICFR advisory, implementation, and review services designed to help Public Interest Entities achieve sustainable compliance while strengthening financial governance. Leveraging deep expertise in governance, risk management, internal controls, and financial reporting, our team works collaboratively with management to build an efficient and risk-based ICFR framework aligned with regulatory expectations and internationally recognized leading practices.
Our ICFR service offerings include:
ICFR readiness assessments, including enterprise-wide gap analysis and implementation planning.
Risk assessment and control framework development, including process mapping, Risk and Control Matrices (RCMs), and ICFR documentation aligned with the COSO Framework.
Control testing and evaluation, covering both design and operating effectiveness of key financial reporting controls.
Control deficiency identification and remediation support, including management assessment and ICFR reporting.
Independent ICFR reviews and continuous compliance support to ensure ongoing regulatory compliance and control maturity.
At PML Professional Services, we recognize that ICFR compliance extends beyond meeting regulatory requirements, it is an opportunity to strengthen governance, enhance operational discipline, improve investor confidence, and establish a resilient financial reporting environment capable of supporting long-term organizational growth.
