Tax incentives can help Islamic finance, but may also attract rent-seekers

In a recent speech, the Assistant MD of the Monetary Authority of Singapore explained that tax incentives should not form the basis for Singapore’s appeal in Islamic finance.  The tax incentives in developed markets should focus on encouraging early adopters and should have fixed expiration dates to avoid companies focusing on continuing the incentives rather than growing their business.  Less developed domestic markets, in contrast, may benefit more from longer-lasting incentives, but these incentives will also have to be phased out eventually.  The easy part is putting the incentives in.  It is much more challenging to determine when to end them.  

Join the ThomsonReuters Islamic Finance Gateway to read this and other articles.. 

Join the discussion on this subject and others in the IFG Community on Tuesday mornings at 9:30am Mecca time (GMT+3).  

Receive updates and discuss new developments in Islamic finance on our social media sites using LinkedIn, Facebook, and Twitter