The Federal Government has strongly defended Nigeria\u2019s newly enacted tax laws following a critical report by global consulting firm KPMG, insisting that most of the issues raised reflect misunderstandings of policy intent rather than genuine errors.<\/p>\n
The new tax regime, which took effect on January 1, 2026, has been the subject of intense scrutiny from businesses, investors and professional bodies. KPMG recently published a commentary highlighting what it described as five major \u201cerrors\u201d and several gaps in the laws. However, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Mr. Taiwo Oyedele, rejected much of the analysis, saying it misrepresented deliberate policy choices made by government.<\/p>\n
In an official response released by the Presidency on Saturday, Oyedele said the government welcomed constructive feedback but took issue with KPMG\u2019s framing of disagreements as flaws.<\/p>\n
\u201cWe welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws,\u201d he said. \u201cHowever, the majority of the publication reflected a misunderstanding of the policy intent, a mischaracterisation of deliberate policy choices, and, in several instances, the repetition of opinions and preferences as facts.\u201d<\/p>\n
Government: \u2018Policy Choices, Not Errors\u2019<\/strong><\/p>\n According to Oyedele, many of the concerns raised by KPMG fall into several categories, including incorrect conclusions by the firm, failure to appreciate the broader reform objectives, and preferences for alternative outcomes rather than actual defects in the law. He acknowledged that a few clerical or cross-referencing issues exist but noted that these had already been identified internally.<\/p>\n The government criticised KPMG for not engaging directly with policymakers before publishing its report, arguing that dialogue would have allowed for clarification and mutual understanding.<\/p>\n Stock Market and Capital Gains<\/strong><\/p>\n One of the key areas of disagreement relates to the taxation of shares and the stock market. KPMG had suggested that the new capital gains provisions could trigger a sell-off.<\/p>\n Oyedele dismissed this claim, explaining that the tax rate on share gains is not a flat 30 per cent, as implied, but ranges from zero to a maximum of 30 per cent, which is expected to reduce to 25 per cent. He added that about 99 per cent of investors qualify for unconditional exemptions, while others may benefit through reinvestment reliefs. Transition Timing and Global Standards<\/strong><\/p>\n On the commencement date of the laws, KPMG had argued that implementation should align strictly with the start of accounting periods. The government countered that such a narrow approach ignores the complexity of transitioning to a new tax system that affects multiple assessment bases, audits, deductions and ongoing transactions.<\/p>\n Similarly, the introduction of taxes on indirect transfers of shares was defended as a global best practice aligned with international anti\u2013tax avoidance standards, particularly the OECD\u2019s Base Erosion and Profit Shifting (BEPS) framework. Oyedele said the measure was designed to close long-standing loopholes exploited by multinationals, not to undermine Nigeria\u2019s competitiveness.<\/p>\n VAT, Definitions and Administration<\/strong><\/p>\n The Presidency also rejected claims of ambiguity in areas such as VAT on insurance premiums, noting that insurance is not considered a taxable supply under Nigerian law and therefore does not require a specific exemption.<\/p>\n Concerns about the inclusion of \u201ccommunity\u201d in the definition of a taxable person were described as a misunderstanding of legislative drafting, with Oyedele explaining that definitions apply wherever a term is used unless stated otherwise.<\/p>\n On governance, the government defended the composition of the Joint Revenue Board, saying its focus on revenue agencies is intentional and consistent with its mandate to provide subnational tax perspectives.<\/p>\n Dividends, Non-Residents and Registration<\/strong><\/p>\n KPMG\u2019s critique of dividend treatment and non-resident registration requirements was also rejected. The government clarified that dividends from foreign companies cannot be treated the same as those from Nigerian companies for tax purposes, and that withholding tax being final does not automatically remove the obligation to register or file returns.<\/p>\n \u201cReturns serve a broader purpose beyond solely generating tax revenue,\u201d Oyedele noted.<\/p>\n Proposals Government Says Could Harm the Economy<\/strong><\/p>\n The Presidency warned that some of KPMG\u2019s recommendations would undermine core reform objectives. These include proposals to exempt foreign insurance firms from taxes on Nigerian-sourced premiums, which the government said would disadvantage local insurers, and allowing tax deductions for foreign exchange purchased on the parallel market.<\/p>\n The disallowance of such deductions, Oyedele said, is a deliberate policy aimed at supporting monetary policy, discouraging round-tripping and strengthening the naira.<\/p>\n Personal Income Tax and Competitiveness<\/strong><\/p>\n KPMG also criticised the top marginal personal income tax rate of 25 per cent as potentially harmful to growth. The government disagreed, arguing that the effective rate could be as low as 22 per cent with pension contributions and remains competitive compared to many African and developed economies.<\/p>\n The shift, according to Oyedele, is part of a broader strategy to reduce the tax burden on businesses while ensuring greater progressivity for high-income earners.<\/p>\n Factual Errors and Omissions<\/strong><\/p>\n The government accused KPMG of including factual inaccuracies, including references to the Police Trust Fund, whose legal lifespan ended in June 2025, and presenting long-standing issues around small company tax thresholds as new inconsistencies.<\/p>\n It also faulted the firm for failing to highlight key benefits of the reforms, such as the planned reduction in corporate tax rates, expanded VAT input credits, exemptions for low-income earners and small businesses, elimination of minimum taxes on turnover and capital, and improved incentives for priority sectors.<\/p>\n In its conclusion, the Presidency emphasised that the tax reforms were the product of extensive stakeholder consultations and legislative scrutiny. While acknowledging that minor clerical issues may arise in such a comprehensive overhaul, the government said mechanisms are in place to address them through administrative guidance and regulations.<\/p>\n Oyedele urged stakeholders to move beyond what he described as \u201cstatic critique\u201d and instead engage constructively with authorities to ensure effective implementation.<\/p>\n \u201cThe tax reform represents a bold step toward a self-sustaining and competitive Nigeria,\u201d he said.<\/p>\n \u201cIts success depends on collaboration, clarity and a shared commitment to the country\u2019s long-term economic development.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" The Federal Government has strongly defended Nigeria\u2019s newly enacted tax laws following a critical report by global consulting firm KPMG, insisting that most of the issues raised reflect misunderstandings of policy intent rather than genuine errors. The new tax regime, which took effect on January 1, 2026, has been the subject of intense scrutiny from […]<\/p>\n","protected":false},"author":7,"featured_media":95019,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,7],"tags":[7815,7821,7822,375],"class_list":["post-97073","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news","tag-kpmg","tag-oyedele","tag-push-back","tag-tax"],"_links":{"self":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/97073","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=97073"}],"version-history":[{"count":0,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/97073\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/media\/95019"}],"wp:attachment":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=97073"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=97073"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=97073"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nHe pointed to the stock market\u2019s strong performance and record highs as evidence that investors understand the reforms and do not see them as harmful.<\/p>\n