The ban on usury – this is a rule derived from ancient times, which to some extent also applies today. Financial institutions from Muslim countries are currently applying various financial solutions that allow this ban to be circumvented, i.e. to offer a financial product with certain benefits and at the same time to comply with the loan ban.
However, such structures to circumvent the usury ban may have negative tax consequences. In practice, the fiscal burden on such specific financial products may be significantly higher than for similar products offered by banks.
Various financial institutions from the Middle East offer the possibility of “modern non-poor banking”, but most often lose tax money on this. A group of such institutions are trying to lobby in London for new tax solutions to reduce the fiscal burden on such financial products.
Will this initiative be accepted? Everything depends on the British authorities.