The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has clarified the policy intent behind Nigeria’s newly gazetted tax laws following concerns raised by KPMG Nigeria.
Oyedele’s clarification comes in response to a KPMG report that highlighted alleged errors, gaps and inconsistencies in the new tax framework, particularly around taxation of shares, dividend treatment, non-resident obligations and foreign exchange deductions.
In a statement issued on Saturday, Oyedele said while some of KPMG’s observations were useful, the bulk of the report reflected misunderstandings of the reforms’ objectives or disagreements with deliberate policy choices.
“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.”
Oyedele said several issues described by KPMG as “errors,” “gaps,” or “omissions” were either incorrect conclusions, taken out of context, or areas where the firm preferred alternative outcomes to those deliberately adopted.
“While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps,” the statement said.
Addressing concerns on the taxation of shares and the stock market, the committee explained that the framework is “structured from 0% to a maximum of 30%, which is set to reduce to 25%,” noting that “99% of investors [are] entitled to unconditional exemption.” It dismissed fears of a market sell-off, stating that “any disposals in December 2025 would have benefited from the reinvestment exemption or enhanced deductions under the new law.”
On the commencement date of the laws, Oyedele said a strict alignment with accounting periods “takes a narrow view of the complex transition issues” involved in comprehensive tax reforms.
Clarifying dividend taxation, the committee said dividends from foreign companies could not be franked because no Nigerian withholding tax would have been deducted, adding that “the choice to treat dividends distributed by Nigerian companies differently from foreign companies is a deliberate policy choice.”
The statement also explained that non-residents are not automatically exempt from tax registration even where income is subject to final withholding tax, as returns serve wider compliance purposes.
On indirect transfer of shares, Oyedele said the provision aligns with global best practices and Base Erosion and Profit Shifting (BEPS) initiatives, aimed at closing loopholes exploited by multinationals.
The committee further clarified that insurance premiums are not subject to Value Added Tax, as insurance does not constitute a taxable supply under the Nigeria Tax Act. It added that issues raised around small company exemptions predate the new laws under the Finance Act 2021.
According to the statement, minor clerical and cross-referencing issues identified 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 of the reforms.
