Taiwo Oyedele replies KPMG over gazetted tax laws accusations

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has responded to concerns raised by KPMG Nigeria regarding Nigeria’s newly gazetted tax laws, clarifying that most of the issues flagged by the firm stemmed from misunderstandings of the policy objectives or differences with deliberate reform choices

In a statement released on Saturday, Oyedele acknowledged that some points raised by KPMG were useful, particularly those related to implementation risks and clerical or cross-referencing issues. However, he stressed that the majority of the report misrepresented the intent and structure of the new tax framework.

“The bulk 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 said. He noted that many issues labeled as “errors,” “gaps,” or “omissions” were either incorrect conclusions, taken out of context, or areas where KPMG simply preferred outcomes different from those intentionally adopted.

Key clarifications provided by the committee included:

• Taxation of shares and the stock market: The framework applies rates from 0% to 30%, set to reduce to 25%, with 99% of investors eligible for unconditional exemption. Fears of a market sell-off were dismissed, noting that December 2025 disposals could benefit from reinvestment exemptions or enhanced deductions.
• Commencement date of the laws: Aligning strictly with accounting periods overlooks the complexities of transitioning to a new tax regime, which involves multiple periods, audits, deductions, credits, and penalties.
• Indirect transfer of shares: This provision is a deliberate policy choice aligned with global best practices and BEPS initiatives, aimed at closing loopholes previously exploited by multinationals.
• Insurance premiums: These are not subject to Value Added Tax, as insurance is not considered a taxable supply under Nigerian law.
• Definition of “community”: The statutory definition applies throughout the law unless context requires otherwise, with “includes” indicating a non-exhaustive list of taxable persons.
• Dividend taxation: Dividends from foreign companies cannot be franked due to the absence of Nigerian withholding tax, while dividends from Nigerian companies are treated differently by deliberate policy choice.
• Non-resident obligations: Non-residents are not automatically exempt from tax registration even if income is subject to final withholding tax, as returns support broader compliance.
• Other clarifications: The committee addressed foreign exchange deductions at parallel market rates, linking tax deductibility to VAT compliance, and explained that the Police Trust Fund expired in June 2025. Small company exemptions predate the new laws under the Finance Act 2021. Minor clerical inconsistencies or cross-referencing gaps are being addressed through administrative guidance and regulations.

Oyedele described the reforms as a “bold step toward a self-sustaining and competitive Nigeria” and urged stakeholders to move from “static critique to dynamic engagement” to ensure effective implementation.

The statement follows KPMG Nigeria’s report, which had highlighted potential errors, gaps, and inconsistencies in the new tax laws, warning that issues such as share taxation, dividend treatment, non-resident obligations, and foreign exchange deductions could impact businesses and taxpayers. Oyedele emphasised that the reforms are comprehensive, deliberate, and aimed at enhancing fairness, competitiveness, and revenue generation.

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