The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has pushed back against concerns raised by KPMG over Nigeria’s new tax laws, arguing that most of the issues highlighted by the firm are based on misunderstandings or incorrect conclusions.
In a post on X (formerly Twitter) on Saturday, Oyedele stated that KPMG misinterpreted the majority of the matters it flagged and overlooked the broader objectives of the tax reforms.
“We acknowledge that a few points raised by KPMG are useful, especially regarding implementation risks or clerical cross-referencing issues,” he said. “However, most of the publication reflects a misunderstanding of policy intent, mischaracterisation of deliberate choices, and, in some cases, opinion presented as fact.”
KPMG’s Observations
Earlier, KPMG had pointed out what it described as errors, inconsistencies, gaps, and omissions in the new tax law, which came into effect this month, warning that these issues could hinder the law from achieving its goals.
While the firm acknowledged that several provisions could increase government revenue if properly implemented, it stressed the need to balance revenue generation with sustainable economic growth. It suggested the government review highlighted gaps to ensure objectives are met.
Among the points raised, KPMG noted that Section 3 (b) and (c) of the Nigerian Tax Act mentions individuals, families, companies, trustees, and estates as taxable “persons” but omits “community,” which is defined elsewhere under Section 201. The firm recommended clarifying the law if communities are intended to be taxed.
Other concerns included the treatment of undistributed foreign profits, withholding tax on insurance premiums paid to non-residents, restrictions on foreign exchange expense deductions, and ambiguity on capital loss deductions. KPMG also advised retaining consolidated personal allowances to encourage voluntary compliance and including hydrocarbon tax rates for deep offshore operations.
Oyedele’s Response
Oyedele said dissent is allowed, but it should not be framed as legal “errors” or “loopholes.” He noted that KPMG’s critiques often reflect a preference for outcomes different from deliberate policy choices.
He explained that the new tax regime applies rates from 0 to 30 per cent (planned to reduce to 25 per cent) and that the perceived flat 30 per cent rate on share profits is a misunderstanding. He added that limiting commencement dates to a single accounting period would fail to address transitional issues in continuous transactions.
Oyedele also dismissed KPMG’s points on VAT exemptions for insurance premiums and the “community” definition, noting that statutory interpretation covers such terms throughout the law. He emphasized that the distinction between foreign-controlled companies and Nigerian companies is intentional for tax purposes, and suggested KPMG’s recommendation to exclude foreign companies from tax would negatively affect the local insurance industry.
He further stated that references to the Police Trust Fund Act are outdated, as the Act ceased operation in June 2025.
Finally, Oyedele highlighted key improvements under the new tax law, including simplified and harmonized tax structures, reduction of corporate tax rates from 30 to 25 per cent, expanded input VAT credits, exemptions for low-income earners and small businesses, elimination of minimum taxes on turnover and capital, and enhanced investment incentives for priority sectors.
