“Misunderstandings, not errors,” FG slaps down KPMG’s tax critique
Tax
Abdullateef Fowewe
Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee has fired back at KPMG’s recent analysis of the country’s new tax laws, dismissing most criticisms as “misunderstandings of policy intent” and “opinions presented as facts.”
In a rebuttal, the committee welcomed KPMG’s input on minor implementation risks but argued that the firm mischaracterises deliberate choices as “errors, gaps, or omissions.”
The committee stated, “A significant proportion of the issues described as ‘errors,’ ‘gaps,’ or ‘omissions’ by KPMG are either the firm’s own errors… missed context on broader reforms objectives or areas where KPMG prefer different outcomes than the choices deliberately made.”
Key rebuttals included:
• Stock Market Fears Debunked: Contrary to sell-off warnings, share gains face a graduated tax from 0% to 30% (dropping to 25%), with 99% of investors exempt.
“The market’s performance, which is at an all-time high demonstrates investors understanding,” the committee noted.
• Indirect Share Transfers: This anti-loophole measure aligns with global BEPS standards and won’t harm competitiveness.
• VAT on Insurance: No exemption needed, as premiums aren’t “taxable supplies” under existing law. “If it is not broken, don’t fix it.”
• Progressive PIT: The 25% top rate (effective ~22% with pensions) is competitive versus peers like Ghana (35%) or the U.S. (37%), promoting fairness without stifling growth.
The committee rejected KPMG proposals like exempting foreign insurers (which would hurt locals) and parallel-market forex deductions (aimed at stabilizing the Naira).
They corrected “factual errors,” such as referencing the expired Police Trust Fund, and praised overlooked wins: corporate tax cuts to 25%, VAT credit expansions, and small business exemptions.
“While it is legitimate to disagree with policy direction, disagreements should not be framed as errors,” the response emphasised, urging “dynamic engagement” over static critiques.
