TAX SYSTEM AND ISLAMIC FINANCE IN NIGERIA: A PROGNOSIS

The emergence of the adverse effect of the global economic meltdown
forced serious minded countries to consider alternative form of finance.
Such consideration was not limited to only develop economies like the
United Kingdom, developing economies like Nigeria considered that too,
by consolidating on an already existing legislation. The study’s singular
objective is to prognosize the present indications of the Federal Inland
Revenue Services (FIRS) guidelines on Islamic Finance, by using models
drawn from the guidelines to explain the tax implications. Interactions
carried out on the staff of FIRS and Jaiz bank, coupled with the
examinations of the FIRS guidelines on tax implication on Islamic
Finance and annual reports and accounts of Jaiz bank informed the
prognosis. The study concludes the guidelines issued by FIRS for tax
purposes are indeed not without creating the possibility of challenges in
future, however, it seeks to reduce the risk of economic double taxation
and to provide taxable persons with clarity on tax treatment of Islamic
finance products and services as demonstrated in global tax practices to
stimulate economic growth and develop tax revenue.