Sukuk Structure and Tax Implications In Nigeria

Sukuk Structure and Tax
Implications In Nigeria
Kabiru Isa Dandago Department of
Accounting, Faculty of Management
Sciences, Bayero University, Kano –
Nigeria kidandago@gmail.com
&
Bashir Sharif Isyaku
Group Lead Tax Audit
Federal Inland Revenue Service, Kano
sharif.bashir@firs.gov.ng
ABSTRACT
The objective of the paper is to explain and
describe
the
structure
of
sukuk
(shariacompliant infrastructure bond) and its
tax implications in Nigeria. Sukuk, as a nonoil
source of financing to both public and
private sectors of the Nigerian economy, has
a lot of potentials for massive corruption-
free infrastructural development in all the
sectors of the economy, especially
education, road and railway construction,
agriculture, water resources, electricity and
health. As an emerging issue and new
frontier of knowledge that is misunderstood
or misconceived by many Nigerians, Sukuk
and all its dimensions need to be explained
and described as to how it could serve as the
right solution to the infrastructure deficit in
the country and beyond. Islamic Financial
Contracts which are prerequisite to
Accounting and Finance Research Association
understanding Sukuk Structure and its tax
implications are also briefly explained. The
need for provision of level playing field for
the operators of conventional bond and
Sukuk by the Nigerian Tax Regulator (FIRS) is
stressed by the study. The need for the FIRS
to review the guidelines on tax implications
of NonInterest Banking and other
shariacompliant transactions in Nigeria,
which were issued in 2013, to include other
non – banking financial transactions like
sukuk issuance, is emphasized. Keywords:
Sukuk, Tax implications, Noninterest finance,
Islamic Financial Contracts.

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