The chancellor has introduced legislation which will now treat these Sukuk transactions as being similar to conventional bond transactions, thereby removing the tax disadvantage for its use.
This change should lead to a sharp increase in the usage of these kinds of Islamic financing instruments - not only by businesses which want to be Shariah-compliant, but also by other businesses which want to diversify their investor base and tap into the immense pool of Islamic finance in the oil rich Middle East.
The chancellor has not only created the framework for London to emerge as the leader in the global Islamic finance industry but his changes are likely to be replicated in many other countries.
Islamic finance will move from being niche to the mainstream as a viable and valid financing option for all. - Darshan Bijur
BBC: Changes to the tax system unveiled in the Budget will potentially make the UK a key world centre in the development of Islamic finance - a market currently estimated to be worth $400bn globally.
Islamic finance is based on Islamic principles and jurisprudence (Shariah).
The basic Shariah prohibitions are on the earning (or payment) of interest, speculation, contractual uncertainly and transactions which are overly advantageous to one party at the expense of another.
The Shariah also prohibits any participation in weapons, pork, gambling, pornography and alcohol businesses.
Overcoming most of these prohibitions is very difficult in the conventional finance system.
The Islamic finance industry has thus developed various Shariah-compliant structures in order to provide investment opportunities and to meet the financing needs of businesses and investors who want to comply with the Shariah. Islamic finance: From niche to mainstream by Darshan Bijur
Mark Alexander
7 comments:
Mr. Brown, you have sold your nation's soul for 30 pieces of silver.
Actually, maybe I'm wrong, 'tis not the 30 pieces of silver Gordon wants, but the crown he thinks that money rolling through the nations coffers will accord him. Though given his propensity to rob others blind, will he be so circumspect with Islamic monies, then again, given the preferred method of dealing with thieves, I think even Gordon might be constrained to keep his hands in the pockets of those who he knows will not cut them off.
Hmmm....maybe there is something to be said for these shariah practices after all.
On and on the West goes, funding its own destruction and even altering long-time financial structures to do so.
Always:
I find it absolutely amazing that we British, with London as our super-successful financial centre, should allow such changes to be made in the way things are financed. This is FOLLY of the first degree. Instead of facilitating such financial procedures, I would ban them - OUTRIGHT! We need to PRESERVE our own SUPERIOR ways of doing business. But GREED wins the day - yet again!
Incidentally, it was reported in last Saturday's Financial Times that Aston Martin has been taken over on a Shari'ah-compliant basis by a Kuwaiti consortium. Kuwait team acquires Aston Martin marque
I can't give you the link to the Financial Times article (which was far more detailed) because it is available to subscribers only. I read about it in the plane on the way home in the regular newspaper. It made for a most disturbing read, I can tell you.
So when Prince Charles was over there hob-nobbing with his pals, did he tip them the wink about the availability of his favorite brand of cars?
Will they get Land Rover next, after all the Chinese are now exporting BMW improved M.G. clones that we so casually let them have the whole production line for.
Sometimes one wonders at the crass stupidity of, and the totally masturbatory excuses for their actions, given by the captains of big business.
Will we franchise the Queen to MacDonalds, so they can use her mugshot to compete against Burger King?
Will wee see 007 driving a shariaised Aston, where they have changed the pig-skin seats to halal
goat-skin?
Will it be written into the contracts, that James Bond must be ever so nice to any islamic terrorists characters in a future Bond-flick?
And will he be forced to abandon his womanising ways and carry a prayer rug to work? So sorry Miss Moneypenny!
Oh, and that "vodka and tonic, shaken not stirred" will have become "peppermint tea with a twist of lemon!"
Come on for hecks sake.
What kind of shambling idiots run this darned country?
Oh dear, I just remembered who.
I am so going to love to watch them all get their come-uppances, as the fates do not allow fools to persevere without a fall.
Should I be glad to be seen as living amongst a country descended towards being thought of by the rest of the world as bunch of booze swilling idiots, with a police force in the slimy paws of the government, where any nutter can wield a gun or children stab each other with knives willy-nilly on the streets, and where any hate monger can spew their vile billious attacks against the Nation that fosters their children?
Someone recently said that many now think of us the laughing stock of Europe.
It is plain to see why, and it has got to stop.
So sad to watch us all go down incrementally into the abyss because our leaders are so stupid!!!!
One can note that ordinary posters at this, and similar blogs, have more knowledge of the Islamic code, and thus should have been consulted.
Eleanor:
So sad to watch us all go down incrementally into the abyss because our leaders are so stupid!!!!
How true your words are! We are indeed going down incrementally into the abyss, and there is no doubt that our leaders are "stupid", too.
One can note that ordinary posters at this, and similar blogs, have more knowledge of the Islamic code, and thus should have been consulted.
If only!
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