The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has come out in defence of the Nigeria Tax Act, NTA, explaining the policy direction while insisting that KPMG Nigeria failed to properly understand the reform.
Oyedele made this known in a statement issued on Saturday, following KPMG’s review of the NTA, in which the firm highlighted what it described as weaknesses in the legislation.
KPMG stated: “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,” while calling for a review of the law.
Responding, Oyedele said: “We welcome all perspectives that contribute to a shared understanding and successful implementation of the new tax laws.
“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.
“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 have already been identified internally.
“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 had adopted a similar approach to other professional firms that 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.”
What KPMG Left Out
After offering a detailed, point-by-point response to KPMG’s claims, Oyedele noted that “While acknowledging the objectives of the reform, KPMG could have highlighted the major structural improvements under the new laws, including:
“Simplification and tax harmonisation,
“The scope for reduction in corporate tax rate from 30% to 25%,
“Expanded input VAT credits for businesses,
“Tax exemption for low-income earners and small businesses,
“Elimination of minimum tax on turnover and capital, and
“Improved investment incentives for priority sectors. A balanced assessment would have recognised these transformative elements, among others.”
Conclusion And Way Forward
He further stated that “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.
“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.
“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.
“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.
“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.”
