IslamicFinance.de

In May this year the National Treasury issued proposed tax amendments as part its stated intention of putting Islamic banks in South Africa on an equal footing with traditional conventional finance. The Proposed Tax Amendments address the Mudarabah (investment), Murabaha (mark-up financing transaction) and Diminishing Musharaka (partnership arrangements generally used for project or home financing) financial structures. The proposed Tax Amendment document acknowledges that, "Tax has become a hindrance to the vibrant and growing Islamic financial market" in South Africa. While these proposed amendments may sound complicated the critical elements for Muslims in South Africa are the real commitment of National Treasury to ensure that South African Muslims enjoy the same benefits from the formal banking sector that are currently enjoyed by other South Africans and that South Africa is positioned to become a key financial hub on the African continent, where Islam is the majority religion.