Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has responded to KPMG’s recent observations on Nigeria’s new tax laws, describing much of the firm’s analysis as a misrepresentation of policy intent and deliberate reform choices.
In a statement issued Saturday via his official X handle, Oyedele acknowledged that some of KPMG’s points were useful, particularly those relating to implementation risks and clerical matters. However, he stressed that “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.”
Oyedele addressed several areas where KPMG had raised concerns:
Taxation of Shares: He dismissed fears of a stock market sell-off, clarifying that the tax rate on share gains is not a flat 30%. “The framework is structured from 0% to a maximum of 30%, set to reduce to 25%, with 99% of investors entitled to unconditional exemption,” he explained.
Commencement Date: He argued that KPMG’s suggestion to align commencement strictly with accounting periods was “a narrow view” that ignored complex transition issues across multiple bases of assessment.
Indirect Transfer of Shares: Oyedele defended the provision as a global best practice aimed at closing loopholes exploited by multinationals, insisting it would not undermine competitiveness.
VAT on Insurance Premiums: He noted that insurance premiums are not taxable supplies under Nigerian law, making a specific exemption “academic.”
On KPMG’s claim that including “community” in the definition of a taxable person created ambiguity, Oyedele said:
“Definitions provided in the law apply wherever the defined term appears, unless the context requires otherwise. This approach is consistent with modern legislative drafting principles.”
He also clarified the composition of the Joint Revenue Board (JRB), stressing that its limited membership was intentional to ensure focus on revenue coordination.
Oyedele rejected KPMG’s proposals that he said would undermine reform objectives, including exempting foreign insurers from tax on Nigerian premiums and allowing deductions for foreign exchange purchased at parallel market rates.
“By removing the tax subsidy for patronage of the parallel market, the policy aims to reduce incentives for round-tripping and redirect legitimate FX demands to the official market,” he stated.
On personal income tax, he argued that Nigeria’s top marginal rate of 25% was competitive compared to countries such as Ghana (35%), South Africa (45%), and the UK (45%).
Oyedele criticised KPMG for overlooking structural improvements in the new laws, including simplification, harmonisation, reduced corporate tax rates, expanded VAT credits, exemptions for low-income earners, and elimination of minimum tax on turnover.
He concluded by urging stakeholders to move from “static critique to dynamic engagement,” emphasising that effective implementation would depend on administrative guidance, clarifications from tax authorities, and complementary regulations.
“The tax reform represents a bold step toward a self-sustaining and competitive Nigeria,” Oyedele said.
