Presidential Fiscal Policy and Tax Reforms Committee has reacted to a recent publication by KPMG on Nigeria’s newly enacted tax laws.
Recall that KPMG flagged five major ‘errors’ or concerns in Nigeria’s new tax laws, which began implementation on January 1, 2026.
However, in a response released on X on Saturday by the Chairman of the Tax Committee, Taiwo Oyedele, it was said that much of KPMG’s position was based on misunderstandings of policy intent and deliberate reform choices rather than genuine errors or gaps.
The committee said it welcomed constructive feedback on the tax reforms and acknowledged that some of KPMG’s observations relating to implementation risks and clerical or cross-referencing issues were useful. However, it argued that the majority of the claims framed as “errors” or “omissions” were either invalid conclusions, misinterpretations of the law, or differences in policy preference.
According to the committee, disagreements over policy direction should not be presented as technical flaws, adding that more productive engagement would have involved direct consultations, as adopted by other professional firms.
Addressing concerns over the taxation of shares, Oyedele said that the new chargeable gains framework does not impose a flat 30 percent tax on share sales. Instead, it operates on a graduated scale from zero to a maximum of 30 percent, which will reduce to 25 percent, with about 99 percent of investors enjoying unconditional exemptions. It noted that stock market performance at record highs contradicts claims that the reforms would trigger a sell-off.
On the commencement date of the laws, the committee rejected suggestions that reforms should begin strictly at the start of an accounting year, arguing that such an approach ignores the complexity of transitioning across multiple tax bases, accounting periods, and ongoing transactions.
The committee also defended provisions taxing indirect transfers of shares, describing them as aligned with global best practices and aimed at closing loopholes long exploited by multinationals. It dismissed claims that the measure could undermine economic stability.
Responding to comments on VAT and insurance premiums, the committee explained that insurance premiums are not considered taxable supplies under Nigerian tax law, making calls for a specific exemption unnecessary.
Several of KPMG’s observations were described as reflecting misunderstandings, including concerns about the definition of “community” as a taxable person, the composition of the Joint Revenue Board, and the treatment of dividends from foreign and Nigerian companies. The committee said these were deliberate drafting and policy choices consistent with international standards.
It also rejected proposals that would exempt foreign insurance companies from tax on Nigerian-written premiums, warning that such a move would disadvantage local firms. Similarly, it defended the disallowance of tax deductions on foreign exchange purchased at parallel market rates, saying the policy supports efforts to stabilize the naira and curb round-tripping.
On personal income tax, the committee countered claims that the new top marginal rate of 25 percent was oppressive, noting that effective rates could be lower and remain competitive when compared with several African and developed economies.
Oyedele further accused KPMG of factual errors, including references to the Police Trust Fund, which it said had expired in 2025, and issues around small company tax exemptions that predated the new laws.
While criticizing the publication, the committee chairman said KPMG failed to highlight major benefits of the reforms, such as tax harmonization, reduced corporate tax rates, expanded VAT credits, exemptions for low-income earners and small businesses, and improved investment incentives.
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It concluded that the tax reforms followed extensive consultations and legislative scrutiny, and that any minor clerical issues were already being addressed. The committee urged stakeholders to move from “static critique” to constructive engagement to ensure effective implementation of the new tax framework.
“We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws. We acknowledge that a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues. However, the majority of the publication reflected a misunderstanding of the policy intent, a mischaracterization of deliberate policy choices, and, in several instances, repetitions and presentations of opinion and preferences as facts,” the committee clarified.
Oyedele said, “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 prefers different outcomes than the choices deliberately made in the new tax laws; or obvious clerical and editorial matters already identified internally.”
Since the introduction of the tax reform laws, many Nigerians, including opposition figures like former Vice President, Atiku Abubakar and former Labour candidate Peter Obi have slammed the administration of President Tinubu, saying he is overburdening Nigerians with tax and poverty.
