KPMG Advises Businesses to Reinvent Tax Functions Amid Revenue Drive

Nume Ekeghe

KPMG has urged businesses across Africa to urgently reposition their tax functions as governments intensify revenue mobilisation efforts and regulatory reforms reshape the fiscal landscape.

At a webinar titled, “Strengthening the Tax Function to Respond to Regulatory Changes,” the firm’s tax leaders warned that the era of treating tax as a back-office compliance function is over, stressing that companies must adopt a more strategic, technology-driven and risk-aware approach.

The hybrid session convened business leaders and senior accounting executives from blue-chip companies across the region, providing a platform for cross-industry dialogue on navigating the fast-evolving tax and regulatory landscape.

Partner and Head of Tax, Regulatory and People Services, KPMG Africa, Adewale Ajayi, said recent legislative developments signal a clear shift towards revenue expansion.

He said: “If you examine the new Tax Reform Act, you will see that most of the provisions are geared towards boosting government revenue. So the tax and regulatory landscape is changing. It is evolving,” he said.

According to Ajayi, regulatory reforms, digitalisation and global transparency standards are fundamentally altering how organisations operate.

“The key question is: how do you stay ahead of all these developments? Simply put, you need to ensure that your tax function is efficient.”

He warned that compliance failures now carry far-reaching consequences beyond financial penalties.

“Compliance is one of the primary risks organisations face. Failure to comply can result in interest and penalties that could have been avoided. Beyond the financial cost, there is also reputational risk,” Ajayi noted, adding that businesses must build deliberate systems to track regulatory changes and respond proactively.

Beyond meeting statutory obligations, he emphasised that companies must leverage tax as a value-creating function.

“Many organisations are not even aware that there are provisions they can benefit from. An effective tax function can help you identify and capitalise on these tax savings,” he said.

Ajayi outlined five priority areas for strengthening the tax function: regulatory awareness, technology adoption, skills and capability development, operating model efficiency, and stakeholder management. He stressed that modern tax management is increasingly data-driven and requires structured impact assessments and response plans whenever regulatory changes occur.

In his presentation, Partner and Lead, Tax Re-imagined, KPMG West Africa, Olufemi Babem, underscored the interdependence between tax and finance transformation.

“Tax transformation, in many ways, depends on what the accounting function does and on the structure that has been built over time. What you were able to do in the past may no longer be sufficient in today’s digital environment,” he explained.

While transformation is ideally executed alongside finance reforms, Babem cautioned against postponing tax upgrades due to broader organisational delays.

“Delaying tax transformation carries risks. Tax has significant exposure and can materially erode shareholder value if not properly managed. Because of the high level of risk involved, tax transformation can, where necessary, proceed independently,” he said.

He further highlighted the importance of integrating tax technology with existing enterprise resource planning (ERP) systems.

“This is where the handshake happens between your tax solution and your existing ERP system. If your ERP is properly configured, data can flow seamlessly. If not, you may need intermediary solutions to clean and standardise the data,” Babem noted.

Also speaking, Africa Tax Transformation and Technology Lead, Tania Davids, said successful transformation goes beyond installing new systems and requires rethinking processes, data governance and organisational culture.

“It was not just about tax computations or compliance. It was about data understanding where it comes from, how reliable it is, and how it flows through the organisation,” she said.

Davids pointed out that many businesses still rely heavily on spreadsheets and fragmented systems, limiting visibility and increasing risk. With regulators moving towards real-time access to transactional data, she stressed that technology investment is no longer optional. “Technology is not a luxury. It is an imperative,” she said.

She added that embedding tax into core business processes, strengthening governance frameworks and clearly defining ownership across departments are critical to long-term sustainability.