Syariah Bonds Only to be Taxed Once
Thursday, 21 December, 2006 | 15:08 WIB

TEMPO Interactive, Jakarta: The government has promised that all Syariah bonds issued will only be taxed once.

According to Rahmat Waluyanto, Director General of Debts Management, the final tax to be imposed will still have to await Tax Law amendments being prepared by the House of Representatives.

“Tax on Syariah bonds will be based on the amendments to the Tax Law,” he said.

So far, market players have complained about the double levies on Syariah bonds, currently required under the existing regulations, and this has reduced the number of interested investors.

The issuance of the bonds obliges the existence of trustee as the representative of sukuk holder so that there is as though two transactions occur. Double tax impose has not aroused investors' interest as regards sukuk investment.

The Shariah bond market has great potential as growth in value has been fantastic.

In 2002, total Shariah bonds were worth US$1.2 billion, but by the end of 2006, it is estimated that the value will reach US$15 billion.

AGUS SUPRIYANTO