Federal budget - new vistas for Islamic financing

The recently presented Federal Budget 2011-12, despite the challenges and limitations of resources and revenue sources, features numerous measures and incentives to accelerate progress in various industrial and commercial sectors of the economy.
The budgets main principles focus on the following - all incomes are to be equitably taxed, multiplicity of taxation to be removed, simplifying the tax system, control on leakages and corruption, and finally improvement of compliance through effective enforcement. With the correct identification and focus on the avenues that have been identified within the resources available is the start of a journey towards self-sufficiency.
With no new taxes imposed others withdrawn or reduced, salaries, pension, and allowances increased the 2011-12 budget is focusing more on halting the percentage increase of taxation and hinting more on increasing the amount of tax received in the economy. The reduction in federal excise duty, regulatory duty, and elimination of the flood surcharge together with 5-year tax holidays for equity-based projects with steps proposed to encourage investment and promotion of the agriculture sector, the ambit of the budget certainly is aiming for an increase in the tax base of the country.
It would be highly unlikely under the current credit gluttony in the traditional banking system that micro, small, and medium enterprisers would be able to fulfil their capital requirements and increase the taxation base of the economy. In this situation a new avenue of opportunity for financing is coming forth around the world in the form of Islamic banking.
The incentives provided in the recent budget for equity based investment fall well within the scope of Islamic Banking products. With growing demand for these products around the world a World Islamic Finance Summit (WIFS) 2011 is being organised in Karachi on September 21-22 so that local small to medium enterprises and entrepreneurs can take advantage of the tax holidays provided in the budget. A special 'Consultative Group' comprising of senior bankers, Islamic finance specialists and academicians has been constituted to chart out the strategic content for the upcoming event.
The 'Consultative Group' is a public-private collaboration comprising of Syed Salim Raza, former Governor State Bank of Pakistan; Muneer Kamal, CEO KASB Bank, Muhammad Ayub, Riphah International University Islamabad, Salim Ullah, Director Islamic Banking Department, State Bank of Pakistan and Syed Shahjahan Salahuddin, MD, representing the World Islamic Finance Summit (WIFS) 2011.
These experts agree that present circumstances are the perfect mix of opportunities for Islamic investors and financiers to develop products based on Equity-sharing models to take advantage of the numerous opportunities present in the system to encourage new ventures in the country.
With renewed fervour and vigour to further promote the Islamic Banking alternative as a viable solution for enterprisers in the present business environment the market participants should gear themselves up to avail all the opportunities that this Sharia-based model can provide for the betterment of themselves, the society and the nation.