Nigeria’s Tax Reforms Committee Pushes Back Against KPMG Report, Dismisses ‘Errors’ Claims
The Presidential Fiscal Policy and Tax Reforms Committee has issued a detailed rebuttal to a recent publication by KPMG assessing Nigeria’s newly enacted tax laws, PulseNets learned.
The KPMG report had identified five major issues it described as “errors” in the new tax regime, which officially took effect on January 1, 2026. However, the committee maintained that the concerns raised largely stem from misreadings of the legislation and disagreements with the underlying policy direction rather than actual defects in the laws.
In a statement released on Saturday via X by the Chairman of the committee, Taiwo Oyedele, and obtained by PulseNets, the panel said it remains open to professional and constructive criticism but insisted that much of KPMG’s analysis misrepresented deliberate reform choices.
According to the committee, while some of KPMG’s comments on implementation risks, clerical inconsistencies, and cross-referencing issues were useful, most of the points framed as “errors” or “omissions” were described as invalid conclusions, misinterpretations of statutory provisions, or simple differences in policy preference.
The committee stressed that policy disagreements should not be portrayed as technical flaws, adding that more effective engagement would have involved direct consultations, a process it said other professional advisory firms had adopted.
Addressing the issue of share taxation, the committee clarified that the revised chargeable gains framework does not impose a flat 30 percent tax on share disposals. Instead, it applies a graduated structure ranging from zero to a maximum of 30 percent, which is scheduled to reduce to 25 percent. It added that approximately 99 percent of investors will benefit from unconditional exemptions, noting that record-high stock market performance undermines claims that the reforms would spark a sell-off.
On the commencement date of the new tax laws, the committee rejected arguments that reforms should only take effect at the beginning of an accounting year. It explained that such a rigid approach fails to account for the complexities of transitioning across multiple tax bases, accounting periods, and ongoing transactions.
The panel also defended provisions on the taxation of indirect share transfers, describing them as consistent with global best practices and essential to closing loopholes long exploited by multinational corporations. It dismissed suggestions that the measures could destabilize the economy.
Responding to comments on value-added tax and insurance premiums, the committee explained that insurance premiums are not classified as taxable supplies under Nigerian tax law, making calls for explicit exemptions unnecessary.
Several other KPMG observations were described as reflecting misunderstandings of the law. These include concerns around the definition of “community” as a taxable person, the composition of the Joint Revenue Board, and the treatment of dividends from both foreign and Nigerian companies. The committee said these positions reflect intentional drafting and policy decisions aligned with international standards.
It also opposed recommendations to exempt foreign insurance companies from tax on Nigerian-written premiums, warning that such a move would place local insurers at a competitive disadvantage. Similarly, it justified the disallowance of tax deductions for foreign exchange sourced from parallel markets, stating that the policy supports efforts to stabilize the naira and curb round-tripping.
On personal income tax, the committee countered claims that the new top marginal rate of 25 percent is excessive, noting that effective rates may be lower and remain competitive when benchmarked against several African and developed economies.
The committee further accused KPMG of factual inaccuracies, including references to the Police Trust Fund, which it said expired in 2025, as well as issues relating to small company tax exemptions that predated the new legislation.
While criticizing the publication, the committee said KPMG failed to acknowledge key benefits of the reforms, such as tax harmonization, reduced corporate tax rates, expanded VAT credits, exemptions for low-income earners and small businesses, and stronger investment incentives.
Also Read: Tax Reforms: Why Nigerians Are Afraid of January 2026 Implementation — Oyedele Explains
It concluded that the tax reforms were the product of extensive stakeholder consultations and rigorous legislative scrutiny, adding that minor clerical issues identified are already being addressed. Stakeholders were urged to move away from what the committee termed “static critique” and instead engage constructively to support effective implementation of the new tax framework.
“We welcome perspectives that help deepen shared understanding and support the successful rollout of the new tax laws. Some points raised are useful, particularly those relating to implementation risks and clerical or cross-referencing matters. However, most of the publication reflects a misunderstanding of policy intent, a mischaracterization of deliberate choices, and, in several cases, opinions presented as facts,” the committee explained.
“Many of the issues labeled as ‘errors,’ ‘gaps,’ or ‘omissions’ are either KPMG’s own incorrect conclusions, matters not properly understood, missed context on broader reform objectives, areas where different outcomes were preferred over deliberate legislative choices, or straightforward editorial issues already identified internally,” the statement added.
