Sunday, March 1, 2009

Thailand plans to ease tax rules to support bond sales

THAILAND is planning to ease taxation rules to support the development of an Islamic bond market that enables local companies and banks to tap new investors. The Finance Ministry will finish reviewing existing tax issues within the next month, said Pongpanu Svetarundra, director general of the Public Debt Management Office, Bloomberg reported on Feb 25.
Thai Airways International Pcl, the nation’s largest carrier, may be the first company to sell Islamic bonds once new rules are in place, he said. Thailand is seeking to tap into Muslim wealth through an Islamic financial market that has also attracted Singapore, Hong Kong, Japan and the UK, the report said.
The UK government in 2007 introduced tax concessions for Islamic bonds. Malaysia accounted for more than 37% of global Islamic bond sales last year, central bank governor Zeti Akhtar Aziz said on Feb 24.
The wire service reported that Pongpanu didn’t provide details on the tax changes for Islamic bonds, adding taht in 2003, UK authorities scrapped a rule that taxed Islamic home loans twice, giving Muslim homeowners the same tax treatment as in conventional financing.

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