The Presidential Fiscal Policy and Tax Reforms Committee has responded to recent concerns raised by KPMG regarding Nigeria’s newly enacted tax laws, which took effect on January 1, 2026.
In a statement released on X, Committee Chairman Taiwo Oyedele said much of KPMG’s critique stemmed from misunderstandings of the policy intent and deliberate reform choices, rather than genuine errors or gaps.
The committee welcomed constructive feedback, noting that some observations regarding implementation risks, clerical matters, and croTax Committee Refutes KPMG Claims On Nigeria’s New Lawsss-referencing issues were valid. However, it argued that most of KPMG’s claims of “errors” or “omissions” reflected misinterpretations, invalid conclusions, or policy differences.
Oyedele emphasized that disagreements over policy direction should not be framed as technical flaws and encouraged direct consultations for more productive engagement.
Addressing specific concerns, the committee clarified that the new chargeable gains framework for shares does not impose a flat 30 percent tax. Instead, it applies a graduated scale up to 30 percent, reducing to 25 percent, with approximately 99 percent of investors enjoying unconditional exemptions. The committee said stock market performance contradicted claims that the reforms would trigger a sell-off.
The committee defended provisions taxing indirect share transfers, noting alignment with global best practices to close loopholes long exploited by multinationals. It also clarified that insurance premiums are not taxable supplies under Nigerian law, rejecting calls for specific exemptions.
Other points raised by KPMG, including definitions of “community” as a taxable person, the composition of the Joint Revenue Board, and treatment of dividends, were described as deliberate policy choices consistent with international standards. The committee also defended measures such as disallowing tax deductions on foreign exchange purchased at parallel market rates.
On personal income tax, the committee argued that the new top marginal rate of 25 percent remains competitive and not oppressive, citing comparisons with other African and developed economies.
The committee also highlighted factual errors in KPMG’s report, including outdated references to the Police Trust Fund and small company tax exemptions that predated the reforms.
Concluding, the committee urged stakeholders to shift from “static critique” to constructive engagement, emphasizing the benefits of the reforms, including tax harmonization, reduced corporate rates, expanded VAT credits, exemptions for low-income earners, and improved investment incentives.
Oyedele stated, “While a few points raised by KPMG regarding clerical or implementation risks are useful, the majority of the publication reflects a misunderstanding of policy intent and deliberate reform choices. Constructive engagement, rather than mischaracterization, is essential for the successful implementation of Nigeria’s new tax framework.”
