The Tanzania Zambia Railways Authority (TAZARA) should get out and design strategies allowing it to provide passangers transport to Dar residents. TAZARA should be able to operate passangers route to residents living in Dar surbs of Kiwalani, Gongo la Mboto and Pugu, there is no immediate reasons as to why residents of these areas should suffer while a railway line passing through these areas is there , just the management is sleeping!
TAZARA shoud be able to operate fast and reliable transport ferrying passngers to Dar central up to Kurasini from these areas. There is potentail resource but is not used, let us use it to stimulate our economy and easy transport probles facing residents in this part of the city. there no need for money here, the infrastructures are there only change of mind set and will by TAZARA and some others involved. We can manage, let us start from here.
Friday, July 2, 2010
Introduction of Islamic Banking in Tanzania
Islamic Banking: Tax Implications
In recent days banks in Tanzania have introduced Islamic banking as one their key products now being offered to clinets. As the new financing products will positively contribute to diversifying financing instruments in the economy and facilitate economic growth, there are some implicit challenges that will requires immediate attention of policy makers. The immediate challenges will relate to tax treatment especially given the fact that in some cases existing tax laws do not cater for the basic Islamic banking sales or profit sharing principles.
In real sense, there are basically two fundamental tax policy challenges raised by the various Islamic contracts as applied in finance. The first is that many of the Islamic finance tools are sales contracts. Depending on the jurisdiction, this may give rise to both value added and transfer taxes. Some countries where Islamic banking operates have provided explicit tax exemptions for certain types of Islamic transactions to give them tax neutrality. In our case, this is already a challenge and it could only take months not years to see request for tax exemptions coming to us, can we now get prepared!
The other challenges relate to the treatment of income from the profit – sharing modes of the Islamic finance, it basically generates capital gains taxes and taxes on dividends. If TRA will treat Islamic financing in this way, it will restrict the availability or cost of Musharakah and Mudarabah to banks customers.
by Kabakaki
In recent days banks in Tanzania have introduced Islamic banking as one their key products now being offered to clinets. As the new financing products will positively contribute to diversifying financing instruments in the economy and facilitate economic growth, there are some implicit challenges that will requires immediate attention of policy makers. The immediate challenges will relate to tax treatment especially given the fact that in some cases existing tax laws do not cater for the basic Islamic banking sales or profit sharing principles.
In real sense, there are basically two fundamental tax policy challenges raised by the various Islamic contracts as applied in finance. The first is that many of the Islamic finance tools are sales contracts. Depending on the jurisdiction, this may give rise to both value added and transfer taxes. Some countries where Islamic banking operates have provided explicit tax exemptions for certain types of Islamic transactions to give them tax neutrality. In our case, this is already a challenge and it could only take months not years to see request for tax exemptions coming to us, can we now get prepared!
The other challenges relate to the treatment of income from the profit – sharing modes of the Islamic finance, it basically generates capital gains taxes and taxes on dividends. If TRA will treat Islamic financing in this way, it will restrict the availability or cost of Musharakah and Mudarabah to banks customers.
by Kabakaki
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