The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has clarified the intent and structure of Nigeria’s newly gazetted tax laws in response to concerns raised by KPMG Nigeria, insisting that most issues highlighted by the firm stem from misunderstandings or differences with deliberate policy choices. In a statement released on Saturday, Oyedele said while some points raised by KPMG were useful—particularly regarding implementation risks and minor clerical or cross-referencing issues—the bulk of the report mischaracterised the objectives of the new tax framework. “The majority of the publication reflected a misunderstanding of the policy intent, a mischaracterisation of deliberate policy choices, and, in several instances, presentation of opinion and preferences as facts,” Oyedele said. He added that many issues described as “errors,” “gaps,” or “omissions” were either incorrect conclusions, taken out of context, or areas where the firm preferred different outcomes from those intentionally adopted. Oyedele provided detailed clarifications on key provisions flagged by KPMG: Shares and stock market taxation: The framework applies rates from 0% to 30%, set to reduce to 25%, with 99% of investors eligible for unconditional exemption. He dismissed concerns of a market sell-off, noting that disposals in December 2025 could have benefited from reinvestment exemptions or enhanced deductions. Commencement date of the laws: Strict alignment with accounting periods overlooks the complexity of transitioning to a new tax system, which involves multiple periods, audits, deductions, credits, and penalties. Indirect transfer of shares: The provision aligns with global best practices and BEPS initiatives, designed to close loopholes exploited by multinationals. Insurance premiums: These are not subject to Value Added Tax because insurance is not a taxable supply under Nigerian law. Definition of “community”: The statutory definition applies throughout the law unless context requires otherwise, with “includes” indicating a non-exhaustive list of taxable persons. Dividend taxation: Dividends from foreign companies cannot be franked as no Nigerian withholding tax would have been deducted, while dividends from Nigerian companies are treated differently by deliberate policy choice. Non-resident obligations: Non-residents are not automatically exempt from tax registration even if their income is subject to final withholding tax, as returns serve broader compliance purposes. Other clarifications addressed foreign exchange deductions at parallel market rates, linking tax deductibility to VAT compliance as an anti-avoidance measure, and noted that the Police Trust Fund expired in June 2025. The statement also pointed out that small company exemptions predate the new laws under the Finance Act 2021. Minor clerical inconsistencies and cross-referencing gaps are being addressed through administrative guidance. Oyedele described the reforms as a “bold step toward a self-sustaining and competitive Nigeria” and called on stakeholders to move from “static critique to dynamic engagement” to support effective implementation. The clarification follows KPMG Nigeria’s report, which had flagged potential errors, gaps, and inconsistencies in the new tax laws, warning that issues such as share taxation, dividend treatment, non-resident obligations, and foreign exchange deductions could impact businesses and taxpayers. Oyedele emphasised that the reforms are deliberate, comprehensive, and aimed at enhancing fairness, competitiveness, and revenue generation.
