Oyedele Defends New Tax Laws, Says KPMG Misread Policy Intent
Taiwo Oyedele, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has defended Nigeria’s newly gazetted tax laws, saying most of the concerns raised by KPMG Nigeria stem from misunderstandings of policy intent or disagreement with deliberate reform choices rather than genuine errors.
Oyedele’s response follows a report by KPMG which highlighted several provisions of the new tax laws it said could create uncertainty for investors, weaken competitiveness or increase administrative complexity.
The firm raised concerns over the taxation of share disposals, commencement dates, indirect transfer of shares, VAT treatment of insurance premiums, dividend taxation, non-resident registration requirements, and the impact of higher personal income tax rates on competitiveness.
KPMG also proposed exemptions and amendments, including preferential treatment for foreign insurance companies and the deductibility of foreign exchange costs at parallel market rates, which it argued could support investment and compliance.
In a statement issued on Saturday, Oyedele acknowledged that some of KPMG’s observations were helpful but insisted that the bulk of the report misrepresented the objectives and structure of the tax reforms.
“We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws,” the statement said, adding that “a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues.”
However, the committee 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.”
It noted that several issues described by KPMG as “errors,” “gaps,” or “omissions” were either incorrect conclusions, taken out of context, or reflected preferences for alternative outcomes rather than mistakes in the law.
“While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps,” the statement said.
Providing clarifications, the committee explained that the taxation of shares and the stock market is structured on a scale of “0% to a maximum of 30%, which is set to reduce to 25%,” with “99% of investors entitled to unconditional exemption.” It dismissed fears of a market sell-off, noting that disposals in December 2025 would have benefited from reinvestment exemptions or enhanced deductions under the new regime.
On the commencement date of the laws, Oyedele said applying them strictly in line with accounting periods overlooks the complexity of transitioning to a comprehensive tax reform, which spans multiple periods, audits, credits, deductions and penalties.
Addressing indirect transfers of shares, the statement said the provision was a deliberate policy choice aligned with global best practices and the Base Erosion and Profit Shifting (BEPS) framework, aimed at closing loopholes long exploited by multinational companies.
The committee also clarified that insurance premiums are not subject to Value Added Tax, arguing that insurance does not constitute a taxable supply under the Nigeria Tax Act, making calls for explicit exemptions unnecessary.
On dividend taxation, it said dividends from foreign companies cannot be franked because no Nigerian withholding tax would have been deducted, adding that treating dividends from Nigerian and foreign companies differently is a deliberate policy decision based on their distinct tax implications.
The statement further explained that non-residents are not automatically exempt from tax registration even where income is subject to final withholding tax, as registration and returns serve wider compliance and regulatory purposes.
Other clarifications included the disallowance of deductions based on parallel market foreign exchange rates, described as a fiscal policy tool to complement monetary policy; the linkage of tax deductibility to VAT compliance as an anti-avoidance measure; and the Police Trust Fund, which expired in June 2025, making calls for its repeal redundant.
Oyedele also noted that issues relating to small company exemptions predate the new laws, having originated under the Finance Act 2021, and that minor clerical or cross-referencing inconsistencies are already being addressed through administrative guidance and regulations.
“The tax reform represents a bold step toward a self-sustaining and competitive Nigeria,” the committee said, urging stakeholders to move from “static critique to dynamic engagement” to ensure effective implementation.
The clarification comes amid ongoing debate following KPMG Nigeria’s report, which warned that certain provisions of the new tax laws could affect businesses and taxpayers if not clarified. Oyedele maintained that the reforms are deliberate, comprehensive and aimed at improving fairness, competitiveness and revenue generation.
