The Presidential Fiscal Policy and Tax Reforms Committee has faulted a recent publication by KPMG on Nigeria’s new tax laws, describing much of the analysis as a misunderstanding of policy intent and a mischaracterisation of deliberate reform choices.
In a detailed response, the committee said while it welcomes perspectives that support effective implementation, only a few of KPMG’s observations—mainly around implementation risks and clerical or cross-referencing issues—were valid. It argued that most of the issues labelled as “errors,” “gaps,” or “omissions” reflected incorrect conclusions, missed context, or policy preferences presented as facts.
According to the committee, disagreements with policy direction should not be framed as legislative errors. It noted that other professional firms engaged directly with government during consultations, allowing for clarification and mutual learning, an approach it said KPMG could have adopted.
Addressing concerns about the taxation of shares, the committee clarified that the new framework does not impose a flat 30 per cent tax on share gains. Instead, rates range from 0 to 30 per cent, with plans to reduce the maximum to 25 per cent. It added that about 99 per cent of investors enjoy unconditional exemptions, while others qualify through reinvestment. The committee pointed to record stock market performance as evidence that fears of a sell-off were unfounded.
On the commencement date of the new laws, the committee rejected suggestions to align implementation strictly with accounting periods, arguing that such an approach ignores the complexities of transition across multiple assessment bases, audits, credits, and penalties.
The committee also defended the introduction of indirect transfer of shares taxation, describing it as a global best practice aligned with Base Erosion and Profit Shifting (BEPS) initiatives to close long-standing loopholes exploited by multinationals.
Responding to VAT-related concerns, it said insurance premiums are not taxable supplies under Nigerian law, making calls for a specific VAT exemption unnecessary. It further dismissed claims of ambiguity around the inclusion of “community” in the definition of a taxable person, citing established principles of statutory interpretation.
Other issues addressed include the composition of the Joint Revenue Board, the treatment of foreign dividends, non-resident tax registration requirements, and the taxation of foreign insurance premiums. The committee warned that exempting foreign insurers while taxing local firms would undermine domestic industry and distort competition.
On foreign exchange, it defended the disallowance of tax deductions for parallel market FX premiums as a deliberate policy to support naira stability and discourage round-tripping. It also backed VAT compliance-linked deductibility as an anti-avoidance measure promoting fairness.
The committee rejected claims that Nigeria’s revised personal income tax rates are oppressive, noting that the top marginal rate of 25 per cent remains competitive internationally and supports progressivity, especially alongside a planned reduction in corporate tax rates.
It also corrected what it described as factual errors, including KPMG’s reference to the Police Trust Fund, which it said expired in June 2025, and concerns about small company exemptions that predate the new laws.
While criticising KPMG’s omissions, the committee highlighted key benefits of the reforms, including tax harmonisation, expanded VAT credits, exemptions for low-income earners and small businesses, elimination of minimum tax on turnover and capital, and improved investment incentives.
The committee concluded that while minor clerical issues may arise in any comprehensive reform, these are already being addressed. It urged stakeholders to move from “static critique” to constructive engagement to support implementation, stressing that administrative guidance and regulations will further clarify the new tax regime as Nigeria pursues a more competitive and self-sustaining economy.