The Presidential Fiscal Policy and Tax Reforms Committee has pushed back against a recent report by global consulting firm KPMG, insisting that the firm’s criticisms of Nigeria’s newly enacted tax laws were largely based on misinterpretations rather than genuine errors.
KPMG had earlier identified five major concerns in the tax reforms, which took effect on January 1, 2026. However, in a statement released on Saturday via X, the chairman of the committee, Taiwo Oyedele, said most of the issues raised reflected misunderstandings of policy intent and deliberate reform decisions.
While welcoming constructive feedback, the committee acknowledged that some of KPMG’s observations—particularly those relating to implementation risks and minor clerical or cross-referencing issues—were valid. It stressed, however, that the bulk of the concerns labelled as “errors” or “omissions” were either invalid conclusions, incorrect interpretations of the law, or differences in policy preference.
The committee argued that disagreements over policy direction should not be framed as technical flaws, adding that more meaningful engagement would have involved direct consultation, as other professional firms had done.
On concerns about the taxation of shares, the committee clarified that the new chargeable gains framework does not impose a flat 30 per cent tax on share sales. Instead, it operates a graduated structure ranging from zero to a maximum of 30 per cent, which will later reduce to 25 per cent. According to the committee, about 99 per cent of investors are entitled to unconditional exemptions, noting that record highs in the stock market undermine claims that the reforms would trigger a sell-off.
Addressing questions about the commencement date of the laws, the committee dismissed suggestions that reforms must begin strictly at the start of an accounting year, saying such an approach overlooks the complexity of transitions across multiple tax bases, accounting periods and ongoing transactions.
The committee also defended provisions on the taxation of indirect share transfers, describing them as consistent with global best practices and aimed at closing loopholes long exploited by multinational companies. It rejected claims that the measures could threaten economic stability.
On value-added tax and insurance premiums, the committee explained that insurance premiums are not considered taxable supplies under Nigerian tax law, making calls for specific exemptions unnecessary.
Several other KPMG concerns were attributed to misunderstandings, including issues around the definition of “community” as a taxable person, the composition of the Joint Revenue Board, and the treatment of dividends from Nigerian and foreign companies. The committee said these were deliberate drafting and policy choices aligned with international standards.
It also opposed proposals to exempt foreign insurance companies from tax on premiums written in Nigeria, warning that such exemptions would disadvantage local firms. Similarly, it defended the decision to disallow tax deductions on foreign exchange purchased at parallel market rates, saying the policy supports naira stability and curbs round-tripping.
On personal income tax, the committee rejected claims that the new top marginal rate of 25 per cent was excessive, noting that effective rates could be lower and remain competitive compared with several African and developed economies.
The committee further accused KPMG of factual inaccuracies, including references to the Police Trust Fund, which it said expired in 2025, and issues surrounding small company tax exemptions that existed before the new laws.
It also faulted KPMG for failing to highlight key benefits of the reforms, such as tax harmonisation, reduced corporate tax rates, expanded VAT credits, exemptions for low-income earners and small businesses, and improved investment incentives.
The committee concluded that the tax reforms were the product of extensive consultations and legislative scrutiny, adding that minor clerical issues were already being addressed. It urged stakeholders to shift from what it described as “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,” the committee said, while maintaining that most of KPMG’s claims were based on misunderstandings, mischaracterisation of deliberate policy choices, or the presentation of opinion as fact.
