The Presidential Fiscal Policy and Tax Reforms Committee has dismissed key aspects of a recent publication by KPMG on Nigeria’s new tax laws.
An earlier report had revealed how KPMG, a globally renowned auditing firm with expertise on tax services, said it had identified loopholes in the laws, asking the Federal Government to fix ‘the gaps’.
In a statement titled ‘Response to KPMG: Observations on Nigeria’s New Tax Laws’, and shared by its Chairman on his X handle on Saturday, the committee said it welcomed constructive perspectives but noted that only a few of KPMG’s points were useful, particularly those relating to implementation risks and clerical or cross-referencing issues.
‘We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws. We acknowledge that a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues. However, 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’, the committee said.
It stated that many of the issues described by KPMG as errors, gaps or omissions were either incorrect conclusions by the firm, matters not properly understood, missed context on broader reform objectives, or areas where the firm preferred outcomes different from those deliberately adopted in the law.
‘While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps. KPMG would have been more effective if the firm adopted a similar approach like other professional firms who engaged directly providing the opportunity for clarifications and mutual-learning.
‘It is equally important to distinguish between policy choices designed to achieve the reform objectives and proposals that merely represent a firm’s preference’, it noted.
Addressing concerns that the new capital gains provisions would trigger a sell-off in the stock market, the committee said such fears were misplaced, stressing that the applicable tax rate on share gains was not a flat 30 per cent.
The committee added that market data did not support the sell-off narrative.
On the commencement date of the new laws, the committee rejected the suggestion that they should align strictly with the start of an accounting period.
‘The suggestion to set the commencement date as the start of an accounting period (e.g. 1 January 2026) takes a narrow view of the complex transition issues. A wholesale reform affects myriad issues beyond the accounting period, spanning multiple periods, different bases of assessment (preceding year, actual year), as well as issues related to audit, deductions, credits, and penalties’, it said.
The committee also defended the provision on indirect transfer of shares, describing it as a deliberate policy choice in line with global best practices.
On VAT and insurance premiums, the committee noted that a specific exemption was unnecessary.
On non-resident taxation, it clarified that withholding tax deductions did not remove registration and filing obligations.
It also said proposal to exempt foreign insurance companies from tax on premiums from insurance written in Nigeria to deepen penetration would create an unfair competitive advantage for local firms in their own market.
