On 1 April 2022, the Federal Inland Revenue Service (“FIRS”) announced the commencement of the operation of the Non-Interest Finance (Taxation) Regulations 2022 (the “Regulations”). The Regulations, which apply to non-interest financial instruments and institutions operating under the principles of Islamic commercial jurisprudence, were issued to provide a legal framework for the tax regulation of financial institutions offering non-interest financial services in Nigeria.
In addition, the Regulations ensure equal treatment of both conventional and non-interest finance transactions and aim to promote the collaboration of relevant government authorities in the regulation of non-interest financial services. In this issue, we highlight certain impactful provisions of the Regulations.
Highlights of the Regulations
Essentially, the Regulations comprise 7 (seven) parts. Part I relates to its objectives while Part II provides for sale-based products. Part III addresses equity-based products and Part IV provides for lease-based products. Part V examines the relevant fee or agency-based products while Part VI briefly elaborates on other investment products. Lastly, Part VII consists of the supplementary and general provisions.