KPMG misunderstood new tax laws, says Oyedele
The head of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has defended the Nigeria Tax Act by clarifying its policy intent and stating that KPMG Nigeria misinterpreted the reform.
Oyedele provided this clarification in a statement released on Saturday, responding to KPMG's analysis of the Nigeria Tax Act, which pointed out what it termed perceived weaknesses in the legislation.
In its evaluation, KPMG noted: “There are certain errors, inconsistencies, gaps, omissions, and lacunae in the new tax laws that need to be urgently reconsidered to ensure the attainment of the stated objectives,” and also called for a review of the legislation.
In response to the report, Oyedele remarked: “We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws.”
He recognized some elements of KPMG's submission, saying: “We acknowledge that a few points raised by KPMG are useful, especially regarding implementation risks and clerical or cross-referencing issues.”
However, Oyedele criticized the overall evaluation, stating: “Nevertheless, the majority of the publication demonstrated a misunderstanding of the policy intent, a misrepresentation of intentional policy choices, and, in various cases, the presentation of opinions and preferences as facts.”
He further argued that many of the points raised by the firm were inaccurately characterized, noting: “A significant portion of the issues labeled as “errors,” “gaps,” or “omissions” by KPMG are either:
“The firm’s own mistakes and unfounded conclusions,
“Issues not correctly interpreted by the firm,
“Missed context regarding broader reform objectives,
“Areas where KPMG prefers outcomes different from those deliberately chosen in the new tax laws, and
“Clear clerical and editorial matters already addressed internally.”
Oyedele emphasized that disagreements over policy should be clearly differentiated from actual flaws in the legislation, stating: “While it is valid to disagree with the policy direction, differences should not be portrayed as errors or gaps.”
He also criticized KPMG’s method of engaging with the reform process, suggesting: “KPMG would have been more effective if they had followed a similar approach as other professional firms that engaged directly, allowing for clarifications and mutual learning.”
According to him, it is vital to maintain clarity between policy intent and professional preference, adding: “It is equally crucial to distinguish between policy choices aimed at achieving reform objectives and suggestions that simply reflect a firm's preferences.”
After addressing KPMG's points in detail, Oyedele indicated that the firm did not sufficiently acknowledge the core benefits embedded in the new tax laws, stating: “While recognizing the reform's objectives, KPMG could have emphasized the significant structural improvements within the new laws, such as:
“Simplification and tax harmonization,
“The potential for a reduction in the corporate tax rate from 30% to 25%,
“Expanded input VAT credits for businesses,
“Tax exemptions for low-income earners and small enterprises,
“Abolition of minimum tax on turnover and capital, and
“Enhanced investment incentives for priority sectors. A more balanced assessment would have acknowledged these transformative aspects, among others.”
He clarified that the reform process was both inclusive and consultative, explaining: “The tax reform results from extensive consultations with various stakeholder groups, in addition to a legislative process that included well-publicized public hearings and avenues intended for all stakeholders, including international firms, to contribute their technical expertise at the development stage.”
Oyedele acknowledged the possibility of minor technical issues arising in a reform of such scale, adding: “In any comprehensive overhaul of a nation’s tax framework, clerical inconsistencies or cross-referencing gaps may occur, and these are already being identified within the government.”
He described the new tax regime as a strategic shift for the country, saying: “The tax reform represents a bold step toward a self-sustaining and competitive Nigeria. An effective review needs to connect identified gaps to clear policy intents and the reality of modern-day tax systems within the context of economic development and global competitiveness.”
Oyedele also highlighted the role of implementation and regulation in determining the success of the law, noting: “At this stage, the effectiveness of the tax law depends on administrative guidance, clarifications from the tax authority, and regulations to complement precise statutory provisions where necessary pending future amendments.”
He concluded by calling for a more constructive engagement from stakeholders, stating: “We urge all stakeholders to pivot from a static critique to a dynamic engagement model, which allows for clarifications and a productive partnership in the implementation of the new tax laws.”
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