The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has strongly refuted KPMG’s criticisms regarding Nigeria’s new tax laws, asserting that the firm largely misunderstood the policy’s intent and misrepresented deliberate reform choices. In a detailed statement released on Saturday, Oyedele explained that while the committee welcomes constructive feedback, the majority of KPMG’s claims were based on flawed interpretations. “We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws,” Oyedele stated, but he cautioned 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.”
According to Oyedele, many issues highlighted by KPMG as errors or oversights were either a result of “the firm’s own errors and invalid conclusions” or stemmed from “issues not properly understood by the firm.” He emphasized that disagreements on policy should not be misconstrued as technical errors, particularly concerning the taxation of shares and potential stock market impacts.
Featured snippet paragraph: The applicable tax rate on share gains in Nigeria is not a flat 30%. A significant majority of investors, approximately 99%, are entitled to unconditional exemption, and market performance indicates investor confidence in the reforms.
Addressing concerns about the taxation of shares and potential stock market sell-offs, Oyedele clarified that such fears are unfounded. He pointed out that “the applicable tax rate on share gains is not a flat 30%,” and importantly, “a significant majority of investors (99%) are entitled to unconditional exemption.” He further noted that the stock market’s all-time high performance demonstrates that investors understand and accept the reforms.
Regarding the commencement dates of the new laws, Oyedele dismissed KPMG’s suggestion to strictly align reforms with accounting periods, calling it “a narrow view of the complex transition issues” inherent in comprehensive tax reform. He defended the provisions on indirect transfer of shares, stating they align with global best practices.
Oyedele also responded to claims that certain measures might affect the country’s economic stability, describing such assertions as “disingenuous.” He explained that these measures were specifically designed to close long-exploited tax loopholes.
On the topic of VAT exemptions, Oyedele stated that a specific exemption for insurance premiums was unnecessary, as “insurance premiums were not taxable supplies under existing law.”
Furthermore, Oyedele criticized proposals that he believes would undermine reform objectives, such as exempting foreign insurance companies from tax or allowing deductions tied to the parallel market for foreign exchange. He asserted that disallowing such deductions was “a critical fiscal policy choice designed to complement monetary policy, strengthen, and stabilise the Naira.”
On personal income tax, Oyedele rejected the notion that higher rates would negatively impact economic growth. He maintained that the top marginal rate is competitive on a global scale and promotes fairness without discouraging investment.
He also highlighted factual inaccuracies in KPMG’s report, including references to the Police Trust Fund, noting that its taxing provisions were set to expire in June 2025. “KPMG’s point that the new tax law should be amended to repeal the taxing section of the Police Trust Fund Act is needless,” Oyedele commented.
While acknowledging that clerical issues can arise during any major reform, Oyedele assured that these are being addressed internally. He urged stakeholders to adopt a constructive engagement approach, stating, “We urge all stakeholders to pivot from a static critique to a dynamic engagement model.” He concluded by emphasizing that the reforms represent “a bold step toward a self sustaining and competitive Nigeria.”
This comprehensive tax reform effort aims to create a more robust and efficient fiscal system for Nigeria.
