The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has responded to concerns raised by KPMG Nigeria on Nigeria’s newly gazetted tax laws, saying most of the issues flagged were based on misunderstandings of policy intent rather than actual errors.
Oyedele made the clarification in a statement issued on Saturday, stressing that while some points raised by the professional services firm were helpful, many of the conclusions did not reflect the objectives of the reforms.
“We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws,” the statement said.
According to him, a few of KPMG’s observations were useful, especially those linked to implementation risks and clerical or cross-referencing issues.
However, he noted that “the majority of the publication reflected a misunderstanding of the policy intent, a mischaracterisation of deliberate policy choices, and, in several instances, repetitions and presentation of opinion and preferences as facts.”
The committee said several items described by KPMG as “errors,” “gaps,” or “omissions” were either taken out of context, wrongly concluded, or reflected the firm’s preference for alternative policy choices.
“While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps,” the statement added.
Addressing concerns about taxation of shares and the stock market, Oyedele explained that the new framework provides a tax range from zero to a maximum of 30 per cent, which is expected to drop to 25 per cent, while most investors remain exempt.
“The framework is structured from 0% to a maximum of 30%, which is set to reduce to 25%, with 99% of investors entitled to unconditional exemption,” the statement said.
He also dismissed fears of a stock market sell-off, noting that share disposals made in December 2025 would have benefited from reinvestment exemptions and enhanced deductions under the law.
On the commencement date of the tax laws, Oyedele said tying the reforms strictly to accounting periods failed to consider the complex transition issues involved in a major tax overhaul.
On the indirect transfer of shares, he said the provision was intentional and in line with global best practices and Base Erosion and Profit Shifting initiatives, aimed at blocking loopholes often used by multinational companies.
The committee also clarified that insurance premiums are not subject to Value Added Tax, noting that insurance does not qualify as a taxable supply under the Nigeria Tax Act.
“It is therefore unnecessary to list insurance as exempt,” the statement said.
On the definition of “community,” the committee explained that the definition applies throughout the law unless the context states otherwise, adding that the use of the word “includes” makes the list of taxable persons open-ended.
Addressing dividend taxation, Oyedele said dividends paid by foreign companies could not be franked because no Nigerian withholding tax would have been deducted.
“The choice to treat dividends distributed by Nigerian companies differently from foreign companies is a deliberate policy choice, as they are fundamentally different for tax purposes,” he said.
He also clarified that non-residents are still required to register for tax purposes, even where income is subject to final withholding tax, as returns serve wider compliance functions.
Other issues addressed included the disallowance of deductions based on foreign exchange rates from the parallel market, which Oyedele described as a fiscal policy tool meant to support monetary policy.
He also explained that linking tax deductibility to VAT compliance was designed as an anti-avoidance measure, while calls for the repeal of the Police Trust Fund were unnecessary because the fund expired in June 2025.
According to the committee, concerns around small company exemptions existed before the new laws and were already covered under the Finance Act 2021.
Oyedele added that minor clerical inconsistencies and cross-referencing gaps were being reviewed internally and would be resolved through administrative guidelines and regulations.
“The tax reform represents a bold step toward a self-sustaining and competitive Nigeria,” the statement said.
He urged stakeholders to move beyond criticism and engage actively to ensure effective implementation of the reforms.
The clarification follows a recent KPMG Nigeria report which raised concerns over possible errors and inconsistencies in the newly gazetted tax laws, warning that they could affect businesses and taxpayers if left unaddressed.
