Presidency rebuts KPMG’s claims on new tax laws, defends reform choices
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By Johnbosco Agbakwuru, Abuja
The Presidency has firmly rejected key observations made by KPMG on Nigeria’s newly-enacted tax laws. They described much of the firm’s assessment as a misunderstanding of policy intent and a misrepresentation of deliberate reform choices.
Read Also: There’re errors, gaps, contradictions in new Tax Act – KPMG
In a press release issued by the Presidential Fiscal Policy and Tax Reforms Committee, the Federal Government acknowledged that a few points raised by KPMG, particularly on implementation risks and clerical or cross-referencing issues, were useful.
However, it maintained that the bulk of the commentary framed policy disagreements as errors and presented preferences as facts.
The Presidency noted that many issues labelled by KPMG as “errors,” “gaps,” or “omissions” stemmed from incorrect conclusions, lack of contextual understanding of broader reform objectives, or areas where the firm simply preferred alternative policy outcomes.
Addressing concerns over the taxation of shares, the government clarified that the new chargeable gains framework does not impose a flat 30 per cent tax on share sales.
Instead, tax rates range from zero to a maximum of 30 per cent, set to reduce to 25 per cent, with about 99 per cent of investors enjoying unconditional exemptions, while others qualify subject to reinvestment.
According to the Presidency, the Nigerian stock market’s record performance and increased capital inflows undermine claims that the reforms would trigger a sell-off.
On the commencement date of the new tax laws, the Committee dismissed calls for alignment strictly with accounting periods, arguing that comprehensive reforms inevitably span multiple assessment bases, audits, deductions, credits, and penalties, making a single-date approach impractical.
The Presidency also defended the introduction of taxes on indirect transfers of shares, describing the move as consistent with global best practices and Base Erosion and Profit Shifting (BEPS) initiatives aimed at closing loopholes long exploited by multinational companies.
Responding to KPMG’s observations on VAT and insurance premiums, the government stated that insurance premiums are not taxable supplies under Nigerian VAT law, as they relate to risk transfer rather than goods or services, making calls for explicit exemptions unnecessary.
The statement further rejected claims of ambiguity in the definition of “community” as a taxable person, explaining that modern legislative drafting relies on comprehensive definitions that apply throughout the law unless context dictates otherwise.
On fiscal policy alignment, the Presidency defended provisions disallowing tax deductions for foreign exchange sourced from the parallel market, describing the measure as critical to discouraging round-tripping, strengthening the naira, and supporting monetary policy objectives.
The Committee also pushed back against criticisms of Nigeria’s progressive personal income tax structure, noting that the top marginal rate of 25 per cent for high earners remains competitive internationally and is balanced by a reduction in corporate tax rates to encourage business formalisation and investment.
In correcting what it termed factual errors, the Presidency clarified that the Police Trust Fund Act expired in June 2025 after its statutory six-year lifespan, rendering calls for its repeal within the new tax laws unnecessary.
While faulting KPMG’s analysis, the government said the firm failed to highlight major gains under the reforms, including tax simplification and harmonisation, expanded input VAT credits, exemptions for low-income earners and small businesses, elimination of minimum tax on turnover and capital, and improved incentives for priority sectors.
The Presidency reaffirmed that the tax reforms followed extensive stakeholder consultations and widely publicised public hearings, urging professional firms and other stakeholders to move from “static critique” to constructive engagement to support effective implementation.
According to the Committee, while clerical inconsistencies may arise in any major overhaul, the reforms mark a decisive step toward building a self-sustaining and globally competitive Nigerian economy.
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