President Bola Tinubu’s government has acknowledged the criticism of the new tax laws by a global accounting, tax and audit firm, Klynveld Peat Marwick Goerdeler (KPMG).

It however noted that the majority of the points raised by the accounting firm reflected a “misunderstanding of the policy intent.”

KPMG had faulted the new tax law, highlighting errors, inconsistencies, gaps and ommissions in the document. 

However, Taiwo Oyedele, chairman, p𝘳𝘦𝘴𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 f𝘪𝘴𝘤𝘢𝘭 p𝘰𝘭𝘪𝘤𝘺 𝘢𝘯𝘥 t𝘢𝘹 r𝘦𝘧𝘰𝘳𝘮𝘴 c𝘰𝘮𝘮𝘪𝘵𝘵𝘦𝘦, in a statement circulated on social media on Saturday, refuted KPMG’s critique of the new tax laws, dismissing it as a repetitive “presentation of opinion and preferences as facts.”

“We acknowledge that a few points raised by KPMG are useful, particularly where they relate to implementation risks and clerical or cross-referencing issues. However, 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,” Mr Oyedele said.

According to Mr Oyedele, a significant proportion of the issues described as “errors,” “gaps,” or “omissions” by KPMG are either the firm’s own errors and invalid conclusions, – issues not properly understood by the firm, missed context on broader reforms objectives, areas where KPMG prefer different outcomes than the choices deliberately made in the new tax laws, and obvious clerical and editorial matters already identified internally.

Faulting KPMG’s criticism as containing f𝐚𝐥𝐬𝐞 i𝐧𝐜𝐥𝐮𝐬𝐢𝐨𝐧 𝐚𝐧𝐝 f𝐚𝐜𝐭𝐮𝐚𝐥 e𝐫𝐫𝐨𝐫, Mr Oyedele said “The Police Trust Fund was signed into law on May 24, 2019, with a six-year lifespan under section 2(2) of the Act, which ended in June 2025. Therefore, KPMG’s point that the new tax law should be amended to repeal the taxing section of the Police Trust Fund Act is needless, as the provision no longer exists.”

He added, “The analysis concerning the tax exemptions for small companies affecting large companies’ obligations is not a new issue or an inconsistency in the new law. The small business threshold was introduced via the Finance Act 2021. This issue pre-dates the current tax laws and should not be presented as an error or omission simply by virtue of a higher tax exemption threshold under the new law.”

Mr Oyedele further said, “While it is legitimate to disagree with policy direction, disagreements should not be framed as errors or gaps. KPMG would have been more effective if the firm adopted a similar approach like other professional firms who engaged directly providing the opportunity for clarifications and mutual-learning. It is equally important to distinguish between policy choices designed to achieve the reform objectives and proposals that merely represent a firm’s preference.”

Explaining Tinubu-led government’ policy choice on Taxation of Shares and the Stock Market, Mr Oyedele said “Contrary to the presumption that the new tax provisions on chargeable gains would trigger a sell-off on the stock market, the fact is that the applicable tax rate on share gains is not a flat 30%. The tax framework is structured from 0% to a maximum of 30%, which is set to reduce to 25%. Furthermore, a significant majority of investors (99%) are entitled to unconditional exemption, with others qualifying subject to reinvestment.”

He added, “The market’s performance, which is at an all-time high with increased investment flow, demonstrates investors understanding that the tax changes will enhance the fundamentals of firms both in terms of profitability and cash flows. The sell-off narrative is unsubstantiated as any disposals in December 2025 would have benefited from the re-investment exemption or enhanced deductions under the new law.

He noted that the suggestion to set the commencement date as the start of an accounting period (e.g., 1 January 2026) takes a narrow view of the complex transition issues.

Mr Oyedele stated, “A wholesale reform affects myriad issues beyond the accounting period, spanning multiple periods, different bases of assessment (preceding year, actual year), as well as issues related to audit, deductions, credits, and penalties. Limiting the commencement to a single date for accounting periods would fail to address the intricacies of continuous transactions and other transition matters. KPMG’s proposal is therefore not a “gold standard” to be applied to all new laws as suggested.

“KPMG’s point regarding a specific VAT exemption on insurance premium is technically unnecessary, as an insurance premium is not a “taxable supply” defined under the Nigeria Tax Act. Insurance relates to risk transfer, not the supply of goods or services subject to VAT. As this has always been the administrative and legal position, a specific amendment for exemption is academic. If it is not broken, don’t fix it.”

Mr Oyedele added, “The tax reform is the result of an extensive consultation with various stakeholder groups in addition to the legislative process that included widely publicised public hearings, avenues intended for all stakeholders including international firms to provide technical expertise at the formative stage.

He stated that in any comprehensive overhaul of a nation’s tax framework, clerical inconsistencies or cross-referencing gaps might occur, and these were already being identified within the government.

Mr Oyedele stated, “The tax reform represents a bold step toward a self-sustaining and competitive Nigeria.”