The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has clarified the policy intent behind Nigeria\u2019s newly gazetted tax laws, following concerns raised by KPMG Nigeria, insisting that most issues highlighted by the firm were misunderstandings of policy objectives or disagreements with deliberate reform choices.\n<\/p>\n
In a statement issued on Saturday, Oyedele said while some points raised by KPMG were useful, the bulk of the report mischaracterised the objectives and structure of the new tax framework.\n<\/p>\n
\u201cWe welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws,\u201d the statement said, noting that \u201ca few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues.\u201d\n<\/p>\n
However, the committee emphasised that \u201cthe 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.\u201d<\/p>\n
It noted that several issues described as \u201cerrors,\u201d \u201cgaps,\u201d or \u201comissions\u201d by KPMG were either incorrect conclusions, matters taken out of context, or areas where the firm preferred different outcomes than those deliberately adopted.\n<\/p>\n
\u201cWhile it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps,\u201d the statement said.\n<\/p>\n
The Chairman provided detailed clarifications on key provisions flagged by KPMG.<\/p>\n
On taxation of shares and the stock market, it said the framework is \u201cstructured from 0% to a maximum of 30%, which is set to reduce to 25%,\u201d with \u201c99% of investors entitled to unconditional exemption.\u201d\n<\/p>\n
The statement dismissed fears of a market sell-off, noting that \u201cany disposals in December 2025 would have benefited from the reinvestment exemption or enhanced deductions under the new law.\u201d\n<\/p>\n
On the commencement date of the laws, Oyedele\u00a0said aligning strictly with accounting periods \u201ctakes a narrow view of the complex transition issues\u201d involved in a wholesale tax reform, which spans multiple periods, audits, deductions, credits, and penalties.\n<\/p>\n
Regarding indirect transfer of shares, the statement described the provision as a deliberate policy choice aligned with global best practices and BEPS initiatives, aimed at closing long-exploited loopholes by multinationals. <\/p>\n
The statement also clarified that insurance premiums are not subject to Value Added Tax, explaining that insurance does not constitute a taxable supply under the Nigeria Tax Act, making calls for specific exemption unnecessary.\n<\/p>\n
Addressing the definition of \u2018community\u2019, it said the statutory definition applies throughout the law unless the context requires otherwise, noting that the word \u201cincludes\u201d in the law makes the list of taxable persons non-exhaustive.\n<\/p>\n
On dividend taxation, the committee stated that dividends from foreign companies could not be franked because no Nigerian withholding tax would have been deducted, adding that \u201cthe choice to treat dividends distributed by Nigerian companies differently from foreign companies is a deliberate policy choice, as they are fundamentally different for tax purposes.\u201d<\/p>\n
It also explained that non-residents are not automatically exempt from tax registration even if income is subject to final withholding tax, as returns serve broader compliance purposes.\n<\/p>\n
Other clarifications included disallowing deductions on foreign exchange transactions at parallel market rates, described as a fiscal policy tool to complement monetary policy; linking tax deductibility to VAT compliance, designed as an anti-avoidance measure; and the Police Trust Fund, which expired in June 2025, making calls for its repeal unnecessary.\n<\/p>\n
Issues raised on small company exemptions were noted to predate the new laws under the Finance Act 2021.\n<\/p>\n
The statement highlighted that minor clerical inconsistencies or cross-referencing gaps are already being identified internally and will be addressed through administrative guidance and regulations.\n<\/p>\n
\u201cThe tax reform represents a bold step toward a self-sustaining and competitive Nigeria,\u201d the committee said, urging stakeholders to shift from \u201cstatic critique to dynamic engagement\u201d to support effective implementation.\n<\/p>\n