On 19 June 2019, the Tax Appeal Tribunal (TAT or Tribunal) held that mortgage institutions are not liable to pay Value Added Tax (VAT) on services rendered within the scope of their business. This decision was reached in the case between Infinity Trust Mortgage Bank Plc (Infinity Bank or the Bank) v Federal Inland Revenue Service (FIRS).

According to the Tribunal, services rendered by mortgage institutions within the ordinary course of their business are exempt from VAT under the VAT Act. Thus, the Tribunal emphasised that a mortgage institution would only be liable to VAT where it provides services outside the general scope of business of mortgage institutions.


Infinity Bank is a Nigerian mortgage institution. On 17 May 2018, the FIRS issued a VAT assessment notice on the Bank. However, the Bank objected to the said notice on the basis that its services as a mortgage institution were exempt from VAT. The Bank further filed an appeal before the TAT sitting in Abuja.

The main issue for determination before the TAT was whether the Bank was liable to pay VAT on its services. The Bank contended that as a mortgage institution, it was exempted from VAT pursuant to the provision of Paragraph 2 of Part II of the First Schedule to the VAT Act; which exempts services rendered by Community Banks, Peoples Bank and Mortgage Institutions from VAT. On the other hand, the FIRS argued that the Bank had acted outside the scope of "mortgage business" under Section 26 of Mortgage Institution Act and the Central Bank of Nigeria (CBN) Guidelines for Primary Mortgage Institution 2003 (CBN Guidelines) and generated income that should be liable to pay VAT.

The TAT ruled in favour of Infinity Bank, holding that the Bank is not liable to remit VAT on its services to the extent that its services are performed within the general scope of mortgage businesses under the MIA and the CBN Guidelines. The TAT also held that the FIRS had failed to prove that the bank's income was generated in the course of engaging in non-mortgage related services. Thus, the TAT discharged the FIRS VAT Assessments on Infinity Bank


The TAT's decision reinforces the provisions of the VAT Act on the exemption of services rendered by mortgage institutions from VAT. In addition, the decision makes it clear that the exemption of services rendered by Mortgage institutions from VAT only covers services, which are performed in the ordinary course of business of a mortgage institution.

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