Australia’s Board of Taxation works towards ensuring a level playing field for Islamic finance (By IFN)

Australia’s Board of Taxation works towards ensuring a level playing field for Islamic finance

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AUSTRALIA: Bernie Ripoll, the parliamentary secretary to the treasurer and member of the Australian Labor Party, has announced that the country’s Board of Taxation has submitted its final report on Islamic finance tax treatments to ensure a level playing field for Islamic banking and Takaful products. “We see Islamic finance as a way of opening our capital and credit markets, enhancing competition and innovation, fostering social inclusion, and promoting greater engagement and integration in the Asia Pacific,” he said during a recently held forum in Melbourne. “More importantly, the Shariah prohibition on highly speculative activities not only helps to protect the economy against abuses and distortions, but also forges a closer link between financial activity and the real economy,” Ripoll added. In 2010, the Australian Board of Taxation was commissioned by the government to review the current tax treatments towards Islamic finance instruments; resulting in a consultation paper which was open to feedback from the industry’s stakeholders before being finalized. The report has called for the board to inquire into the treatment of Islamic finance products by the existing Australian tax law and proposed the removal of any regulatory barriers to its development. In line with this, the board has appointed a working group, comprising government officials and assisted by an expert panel, members of the board’s secretariat and officers from the Treasury and Australian Taxation Office. It is encouraging to see Australia, one of the most bullish economies since the 2009 global credit crisis, take to Islamic finance and appreciate its value to the country’s financial and economic system. Superannuation funds and Islamic home mortgages are amongst the products expected to kick off when the Australian Islamic finance industry gains traction.