South Africa Expands Islamic Finance Opportunities

It is proposed that the current legislation in respect of sukuk and murabaha financing will be extended to listed companies, within the 2015 Draft Taxation Laws Amendment Bill (TLAB) that South Africa's Ministry of Finance recently published for public comment. South African Sharia-compliant financing arrangements have been introduced in stages. Changes were made to the tax code to introduce sukuk bond financing arrangements, but these were restricted to the Government and public entities. This is now intended to be available to listed corporates from January 1, 2016. It is also proposed in the 2015 TLAB that it will be possible for listed companies (in addition to banks, as at present) to engage in murabaha financing.

Singapore Defends Expiry Of Islamic Finance Tax Breaks

Ng Nam Sin, Assistant Managing Director of the Monetary Authority of Singapore (MAS), pointed out that, despite the expiry of certain tax incentives, Singapore is still looking to develop the city's Islamic finance capabilities. To ensure that level playing field between Islamic finance and conventional financial products, Islamic finance activities will continue to be incentivized alongside conventional finance activities under Singapore's other existing schemes. However, others have remarked that Singapore is now lagging behind Malaysia, which is establishing itself as the major Islamic financial hub in the region.

Hong Kong Releases Consultation Conclusions On Sukuk Taxation

The government of Hong Kong released the conclusions of a consultation which ended in May 2012. Thus, a taxation framework for Islamic bonds is provided on a par with that for conventional bonds. The promotion of Islamic finance development in Hong Kong has been taken into consideration. Due to Hong Kong's leading role as an international financial centre and China's global financial centre, Hong Kong is able to match the needs of fund raisers and investment demands of investors among China, the Middle East and other parts of the world interested in Islamic financial products. The legislative amendments released are expected to contribute to anchoring more asset management activities in Hong Kong.

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