The Presidential Fiscal Policy and Tax Reforms Committee has faulted a recent analysis of Nigeria’s newly enacted tax laws by global professional services firm KPMG, insisting that the firm misunderstood several key provisions and policy intentions behind the reforms. The committee said the commentary by KPMG misrepresented deliberate policy choices as technical errors and failed to appreciate the broader fiscal and economic objectives of the new legislation.

KPMG had recently published an assessment alleging multiple errors, gaps, and omissions in Nigeria’s new tax laws, urging the Federal Government to urgently review the legislation. Among the concerns raised were fears of double taxation, compliance burdens for non-resident companies, and potential negative effects on investment and the stock market.

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Responding on Saturday, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, said much of KPMG’s analysis was based on misunderstandings, mischaracterisation of reforms, and the presentation of subjective opinions as established facts. While acknowledging that some points raised by the firm were useful—particularly those relating to implementation risks and clerical or cross-referencing issues—Oyedele said the bulk of the commentary failed to situate the reforms within their intended policy framework.

According to him, several issues described by KPMG as “errors” or “gaps” were actually the result of incomplete understanding, missed policy context, or preference for alternative outcomes rather than genuine flaws in the law. He stressed that disagreement with policy direction should not be framed as technical mistakes, noting that other professional firms had adopted a more constructive approach by engaging policymakers directly for clarification.

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Addressing KPMG’s concerns about Section 6(2) of the Nigeria Tax Act, which the firm claimed could lead to double taxation for foreign companies, Oyedele said the interpretation was incorrect. He explained that the provision was designed within a specific policy context and does not automatically subject foreign profits to a flat 30 per cent income tax as suggested.

On fears that new chargeable gains provisions could trigger a sell-off in the stock market, Oyedele said such claims were unsupported by evidence. He noted that the applicable tax rate on gains from shares ranges from zero to a maximum of 30 per cent, which is expected to reduce to 25 per cent, and is not a flat rate. He added that about 99 per cent of investors qualify for unconditional exemption, while others can benefit from exemptions subject to reinvestment.

“The stock market is currently at an all-time high with increased investment flows, which shows that investors understand the reforms strengthen company fundamentals, profitability, and cash flows,” Oyedele said.

He also rejected calls to align the commencement of the new tax laws strictly with accounting periods, explaining that the scale of the reforms affects multiple assessment bases, audit timelines, deductions, credits, and penalties. According to him, tying implementation to a single accounting date would create unresolved transition challenges.

Oyedele further defended provisions on indirect transfer of shares, describing them as consistent with global best practices aimed at curbing base erosion and profit shifting by multinational companies. He said the objective was to close long-standing loopholes rather than undermine Nigeria’s competitiveness.

On value-added tax, he dismissed calls for explicit VAT exemption on insurance premiums, stating that insurance does not constitute a taxable supply under Nigerian tax law. He also clarified that dividends from foreign companies cannot be franked, as no Nigerian withholding tax would have been deducted, adding that the distinction between Nigerian and foreign dividends was deliberate.

The committee chairman also defended measures linking deductibility of expenses to VAT compliance and disallowing deductions for foreign exchange sourced from the parallel market at inflated rates, describing them as anti-avoidance and fiscal stability measures.

Oyedele concluded that KPMG’s publication failed to acknowledge major structural improvements introduced by the reforms, including tax simplification, planned reduction of corporate tax to 25 per cent, expanded VAT credits, exemptions for low-income earners and small businesses, and enhanced investment incentives. He urged stakeholders to adopt a collaborative approach, noting that effective implementation would depend on administrative guidance, regulatory support, and ongoing engagement.