By Ayo Kehinde
The Presidential Fiscal Policy and Tax Reforms Committee has defended Nigeria’s newly enacted tax laws, describing them as a bold reform package designed to strengthen fairness, improve competitiveness, and close long-standing loopholes in the country’s fiscal framework.
In a detailed response to recent observations by global professional services firm KPMG, the Committee—chaired by Mr. Taiwo Oyedele—acknowledged that some issues raised were useful, particularly regarding implementation risks.
However, it maintained that much of the commentary reflected a misunderstanding of policy intent.
The Committee stressed that while professional disagreement is legitimate, deliberate policy choices should not be framed as “errors” or “gaps.”
On concerns that new chargeable gains tax provisions could trigger a stock market sell-off, the Committee clarified that the tax on share gains is not a flat 30%.
Under the Nigeria Tax Act (NTA) 2025, which took full effect on January 1, 2026, the rate ranges from 0% to 30%, with plans to reduce the top corporate rate to 25%.
It added that roughly 99% of investors enjoy unconditional exemptions, while others qualify through reinvestment provisions. The Committee noted that the Nigerian stock market’s current record performance disproves fears of capital flight.
Addressing transition issues, the Committee rejected suggestions that reforms should have waited for the start of individual accounting periods, calling a single-date commencement more practical for wholesale reform.
It also defended the taxation of indirect share transfers as a global best practice aligned with Base Erosion and Profit Shifting (BEPS) initiatives, aimed at blocking loopholes used by multinationals.
Regarding Value Added Tax (VAT), the Committee dismissed calls for specific exemptions on insurance premiums, noting that these are already not considered taxable supplies under Nigerian law.
The Committee also rejected proposals to allow tax deductions for foreign exchange sourced from the parallel market, arguing that such a move would disadvantage local businesses and weaken the naira by encouraging illegal market patronage.
Notably, the Committee pointed out that critics often overlook major gains in the reforms. These include the planned reduction of corporate tax from 30% to 25% and tax exemptions for individuals earning the national minimum wage or less than ₦800,000 annually.
Furthermore, small companies with turnovers below ₦50 million are now subject to zero corporate tax. The reforms also feature the harmonisation of multiple taxes into a single “Development Levy,” which replaces legacy charges such as the Police Trust Fund and IT levies.
The Committee emphasised that the reforms emerged from extensive consultations and remain a decisive step toward a self-sustaining economy.
It urged stakeholders to move toward constructive engagement as the government provides further administrative guidance during the implementation phase.
