KPMG – Nigerian govt defends tax laws amid fresh concerns

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The Presidential Fiscal Policy and Tax Reforms Committee has replied to a recent KPMG report on Nigeria’s recently enacted tax laws.

Remember that KPMG identified five main ‘errors’ or issues in Nigeria’s new tax rules, which took effect on January 1, 2026.

However, in a response to X on Saturday, the Chairman of the Tax Committee, Taiwo Oyedele, stated that most of KPMG’s argument was based on misconceptions of policy intent and deliberate reform choices rather than true faults or gaps.

The committee stated that it appreciated constructive criticism on the tax reforms and recognized that some of KPMG’s views about implementation risks and administrative or cross-referencing issues were relevant.

However, it contended that the majority of the statements labeled as “errors” or “omissions” were either faulty findings, misinterpretations of the law, or variations in policy choice.

The committee stated that disputes over policy direction should not be viewed as technological defects, and that more constructive participation would have required direct consultations, as used by other professional businesses.

Responding to concerns about share taxation, the committee underlined that the new chargeable gains regime does not impose a flat 30% tax on share sales. Instead, it uses a graduated scale from zero to a maximum of 30 percent, which will be reduced to 25 percent, with about 99 percent of investors receiving unconditional exemptions.

It stated that the stock market’s record highs contradicted claims that the reforms would cause a selloff.

On the law’s effective date, the committee rejected recommendations that reforms should begin at the start of an accounting year, stating that such an approach ignores the complexities of moving across numerous tax bases, accounting periods, and ongoing transactions.

The committee also justified regulations taxing indirect share transfers, claiming that they are in line with worldwide best practices and intended to close loopholes that multinational corporations have long abused. It disregarded concerns that the action would jeopardize economic stability.

In response to comments about VAT and insurance premiums, the committee clarified that insurance premiums are not deemed taxable supply under the Nigeria tax law, hence an explicit exemption is unnecessary.

Several of KPMG’s findings were attributed to misunderstandings, including questions regarding the definition of “community” as a taxable person, the membership of the Joint Revenue Board, and the treatment of dividends from foreign and Nigerian enterprises. The committee stated that these were deliberate writing and policy choices in accordance with international standards.

It also rejected suggestions to exempt foreign insurance companies from paying taxes on Nigerian-written premiums, stressing that such a move would harm local firms. Similarly, it defended the policy of disallowing tax deductions for foreign currencies purchased at parallel market rates, claiming that it supported efforts to stabilize the naira and reduce round-tripping.

Regarding personal income tax, the committee refuted claims that the new top marginal rate of 25% was oppressive, saying that effective rates might be lower while being competitive when compared to various African and developed economies.

The committee also accused KPMG of factual inaccuracies, such as references to the Police Trust Fund, which it claimed had ended in 2025, and concerns involving small business tax breaks that predates the new rules.

While criticizing the publication, the committee stated that KPMG omitted to mention key benefits of the reforms, such as tax harmonization, lower corporate tax rates, enhanced VAT credits, exemptions for low-income earners and small enterprises, and improved investment incentives.

It determined that the tax adjustments were the result of extensive consultations and legislative scrutiny, and that minor procedural errors had already been remedied. The committee asked stakeholders to shift from “static critique” to constructive involvement in order to ensure that the new tax structure is implemented effectively.

“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.

“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,” the committee added.

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