IslamicFinance.de

Indonesia is under pressure from banks to match tax breaks and product offerings announced by Malaysia last week to catch up in developing Islamic finance.
Malaysia has the largest market for sukuk and is a global hub for the Islamic finance industry that manages $1 trillion of assets. The government will cut taxes on Shariah-compliant transactions next year to promote “innovation in Islamic securities".
Indonesia failed to sell all of the government sukuk it offered in an auction on Oct. 5, even after suspending sales for two months because investors demanded higher yields than the government was willing to offer.
Malaysia in the past year has issued permits to global investors including Aberdeen Asset Management Plc and Franklin Templeton Investments to start Islamic fund management. The funds, which will invest in ringgit and non-ringgit denominated assets, will be exempt from paying taxes until 2016, according to the central bank.