The Presidential Fiscal Coverage and Tax Reforms Committee, chaired by Taiwo Oyedele, has faulted key observations made by KPMG on Nigeria’s newly enacted tax legal guidelines.
That is in line with an official response issued by the committee on Saturday and posted on X. This follows KPMG’s earlier publication highlighting what it described as gaps, errors, and dangers within the new tax framework.
The committee argues that a lot of the points raised replicate misunderstandings of coverage intent moderately than real errors.
The response comes amid rising debate inside Nigeria’s enterprise {and professional} group over the implications of the wide-ranging tax overhaul signed into regulation in 2025.
What they’re saying
In response to the committee, most of the points labelled by KPMG as “errors,” “gaps,” or “omissions” fall into 5 broad classes: the agency’s personal analytical errors, failure to correctly perceive the reforms, missed reform context, disagreement with deliberate coverage decisions, and clerical points already recognized internally.
“Whereas it’s official to disagree with coverage course, disagreements shouldn’t be framed as errors or gaps.
“KPMG would have been simpler if the agency adopted an analogous method like different skilled corporations who engaged instantly offering the chance for clarifications and mutual studying,” the committee acknowledged.
On capital market issues, the committee dismissed solutions that the taxation of chargeable good points on shares would set off selloffs, noting that the efficient tax fee ranges from 0% to a most of 30%, set to cut back to 25%, with about 99% of buyers qualifying for unconditional exemption.
- It added that latest inventory market efficiency—at document highs—reveals buyers perceive the reforms will enhance company fundamentals.
- The committee additionally defended the choice to tax oblique transfers of shares, describing it as a globally accepted anti-avoidance measure aligned with BEPS requirements, moderately than a menace to competitiveness.
- On VAT, it clarified that insurance coverage premiums should not taxable provides beneath Nigerian regulation, making requires specific VAT exemption pointless.
Different areas addressed embody the composition of the Joint Income Board, dividend remedy for overseas versus Nigerian firms, non-resident registration necessities, and the inclusion of “group” in statutory definitions all of which the committee mentioned have been intentional and in step with fashionable legislative drafting and tax coverage.
Why this matter
Nigeria’s new tax legal guidelines characterize one of the crucial bold fiscal reforms lately, geared toward enhancing equity, boosting funding, and lowering the tax burden on companies and low-income earners.
How these legal guidelines are interpreted by buyers, tax advisers, and directors will considerably affect compliance ranges, capital flows, and total financial confidence.
The sharp change between the reform committee and KPMG highlights the strain between coverage design {and professional} interpretation at a time when Nigeria is searching for to reposition its economic system for sustainable development.
Backstory
In its earlier report, KPMG raised issues over a number of features of the brand new tax legal guidelines, together with the taxation of share disposals, graduation dates for implementation, oblique switch of shares, VAT remedy of insurance coverage premiums, dividend taxation, non-resident registration necessities, and the influence of upper private earnings tax charges on competitiveness.
- The agency warned that some provisions may create uncertainty for buyers, weaken competitiveness, or introduce administrative complexity if not amended or clarified.
- KPMG additionally proposed exemptions and modifications—reminiscent of preferential remedy for overseas insurance coverage firms and deductibility of parallel market FX prices—which it argued may assist funding and compliance.
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