The Presidential Fiscal Policy and Tax Reforms Committee has issued a robust response to a recent evaluation by the global professional services firm, KPMG, which highlighted several perceived errors and gaps in Nigeria's newly enacted tax legislation.
Committee's Core Argument: Policy Intent vs. Legislative Error
In a statement released on 10 January 2026, the committee chairman, Taiwo Oyedele, contended that a significant portion of the issues flagged by KPMG stem from a misunderstanding of the policy objectives behind the laws, rather than from actual mistakes in the drafting. Oyedele acknowledged that some of KPMG's observations on implementation risks and minor clerical issues were useful. However, he emphasized that many points presented as factual errors were, in reality, deliberate policy choices or reflected a difference in opinion.
The committee categorised KPMG's concerns into five areas: incorrect conclusions, a poor grasp of the reforms, lack of context for broader goals, disagreement with policy decisions, and minor editorial matters already noted internally.
Clarifications on Key Tax Provisions
Addressing specific critiques, the committee provided detailed clarifications:
Taxation of Shares: The committee firmly rejected the notion of a flat 30% tax on share gains. It explained that the new framework features rates from 0% to a maximum of 30% (slated to drop to 25%), with nearly 99% of investors eligible for exemptions or reliefs linked to reinvestment. It cited the continued strong performance of the Nigerian stock market as evidence that investors comprehend the long-term benefits.
Indirect Share Transfers: Provisions targeting the taxation of indirect share transfers were defended as being in line with global best practices and international efforts to prevent tax avoidance. The committee stated this measure closes loopholes long used by multinational corporations and does not harm Nigeria's economic competitiveness.
VAT and Registration Rules: Responding to a point about non-resident individuals, the committee argued that the obligation to register or file tax returns is not automatically voided even when withholding tax is applied as a final tax, as filings serve wider compliance purposes. On VAT for insurance, it noted that premiums are not taxable supplies under Nigerian law, making a specific exemption redundant.
Defending the Reform Philosophy
The committee pushed back against several of KPMG's suggestions, framing its decisions as pro-fairness and pro-competitiveness.
It rejected a proposal to exempt foreign insurance firms from taxes while domestic companies pay, stating this would disadvantage local operators. The policy to disallow tax deductions linked to parallel market foreign exchange transactions was justified as supporting naira stability and discouraging round-tripping.
Regarding personal income tax, the committee argued that the new top marginal rate of 25% for high earners remains internationally competitive and aligns with the goal of shifting the tax burden from businesses to wealthy individuals. It lamented that KPMG's report omitted key benefits of the reforms, such as simplified taxes, a planned cut in corporate tax from 30% to 25%, exemptions for low-income earners, and the removal of minimum tax on turnover.
Calls for Engagement Amid Labour Opposition
Oyedele concluded that while minor technical issues are inevitable in any major reform and are being addressed through guidance, stakeholders should move from static critique to active engagement to ensure smooth implementation.
This call comes against the backdrop of opposition from organised labour. The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have previously demanded the suspension of the new laws, warning they could worsen economic hardship for workers. NLC President Joe Ajaero criticised the laws as regressive and drafted without worker consultation, arguing their implementation risks eroding public trust.
