The Federal Board of Revenue (FBR) is examining tax treatment of 'Islamic financial instruments', applicable in different countries, for incorporation of best international practices in the income tax law. During a presentation by Mufti Munib-ur-Rahman and Mujeeb Baig on 'Tax Treatment of Islamic Financial Instruments' here at FBR House, senior income tax officials picked key proposals for examination and necessary action at the appropriate time.
According to FBR, Islamic finance has gripped the world with a strong fervour and passion. The world is recognising the significance of Islamic finance and it has also been deliberated in second and third sessions of UN 'Committee of Experts for International Co-operation in Tax Matters' in the annual meeting held at Geneva. Asian Development Bank (ADB) has also introduced it as an agenda item in its meeting scheduled to be held in October 2008 in Tokyo. The issue would also be discussed in the 5th Association of Tax Authorities of the Islamic Countries (ATAIC) Technical Conference.
Realising the importance of this issue, FBR invited well known scholars of international repute, Mufti Munib-ur-Rahman and Mujeeb Baig, in FBR House, Islamabad, to enlighten the senior tax officials of the Direct Taxes Wing on tax treatment of Islamic financial instruments.
Mumtaz Ahmad, Member, Legal, FBR, inaugurated the session while Irfan Nadeem, Member, Direct Taxes, welcomed the guest speakers. Farida Amjad, Chief of International Taxes, introduced the guest speakers to the participants.
The speakers made a presentation on 'Islamic Financial Instruments' and enlightened the audience on the basic concept of the 'riba-free' instrument. The session was followed by questions/answers, which lasted for one hour and certain future steps, to be taken in this regard as to the tax treatment of the Islamic financial instrument, were noted down by the Income Tax Policy Section for examination and necessary action at the appropriate time.
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