At the daylong 3rd Sri Lanka Islamic Banking and Finance Conference held in Colombo last week, speaking on the Journey to create a Level Playing Field in Sri Lanka, Suresh R I Perera, Principal – Tax and Regulatory, KPMG Ford, Rhodes, Thornton & Co said that there were many milestones achieved towards Islamic Banking in Sri Lanka.
He said that deliberations at Islamic Finance Tax Focus Group were made and lobbied the Ministry of Finance. Submissions to the Presidential Taxation Commission (PTC) were made and there were endorsement in the Report issued by the PTC.
He said that rules and guidelines would be issued by the Commissioner General of Inland Revenue with appropriate amendments where necessary would be considered in identifying the financial instrument for tax purposes under the relevant tax laws.
He said that there should be a level playing field for the Islamic finance transactions structured to allow investors to receive returns in forms other than interest and requires additional transactional steps, which in the absence of specific tax laws, may be looked at individually by tax authorities and taxed in isolation. The additional tax costs make Islamic financial products less competitive compared to conventional counterparts.
Faizel Salieh, Managing Director/CEO , Amana Bank Ltd making the keynote address said that if they are to build the right attitude of Islamic Banking and Finance (IBF) in Sri Lanka there should be right behaviour in the whole financial market and the quality dimension over the quantity dimension and a high level of conviction is also important.
He said it is a challenge to find sound and available alternatives for the financial industry to reflect and focus on market discipline in IBF. He said that IBF business model is in the spotlight not only globally but also in Sri Lanka.
He said the peple are watching and examining whether they would succeed or fail because the conventional system has undergone tremendous pressure.
Within the conference several panel discussions were held on such areas as: The Entry of Conventional Financial Institutions into the IBF Industry; From Private Equity to Listing and Equity Instruments – the Sharia’h Perspective.