IslamicFinance.de

The Indonesian government is considering cutting the levy to zero for all local-currency sovereign bonds from 15% for domestic investors and 20% for international ones. According to Abas A. Jalil, CEO of Amanah Capital Group, the zero tax will definitely encourage more participation by government funds in the Indonesian sukuk market. The proposal aims to revive Islamic banking after the industry shrank to 3.5% of total financial assets in March, from 5% a year earlier. Only one Indonesian company has issued rupiah sukuk in 2016 for the equivalent of $7.3 mn compared with $5.9 bn worth of ringgit sales in Malaysia, the biggest Shariah-compliant debt market.