Australian Senator Seeks to Block Shariah-Compliant Finance Tax Law Reforms

Australian Senator Seeks to Block Shariah-Compliant Finance Tax Law Reforms 

An Australian lawmaker has urged fellow members of parliament to block legislation that would allow financial products that met the Islamic banking principle prohibiting the payment and collection of interest.

Liberal Party Senator Cory Bernardi (pictured) said on Tuesday that sharia-compliant financial services are incompatible with the Australian and way of life as he called on his Senate colleagues to check on any further expansion of the financial products.

Australian lawmakers and business leaders have long been keen on developing the country's shariah-compliant sector and competing in this growing market. However, the South Australian senator is convinced that these financial products run in counter with the competitive economic environment of the country, stressing that "sharia finance is one aspect of sharia or Islamic law and I reject it entirely."

Senator Bernardi made his calls ahead of the scheduled national taxation consultation summit this week that will tackle ways on imposing taxes on Islamic transactions.

The senator expressed alarm that sharia law may eventually extend its influence beyond the borders of financial concerns as he stressed that "we shouldn't be changing our legal system or our legal framework to accommodate a system of laws that is wholly incompatible with Western values."

He warned that 'over-indulgence' of sharia practices would spawn a parallel system within Australia as he pointed out that "it's like a ball of string that once you start tugging at it, the entire ball becomes unravelled."

Senator Bernardi clarified though that his stand on sharia practices should not be taken as an affront to Australian Muslims as he maintained that people must enter an agreement not influenced by sharia laws but by the laws and frameworks currently in force.

He added that a definite Liberal Party stand on the issue would be formally taken once the Labor-led federal government announces its official policy on sharia financial practices.

However, Finance Minister Penny Wong said that it was unfortunate that the Coalition may be opposing the government's policy on sharia practices, which she maintained carries the potential to graduate into a profitable market that warrants federal attention and policy intervention.

Ms Wong expressed hope though that since Australia has been known for being an open and tolerant society, she is looking forward that "our attitude on this issue could reflect that history."

The chairman of the Federal Government's independent advisor on tax laws Dick Warburton accused Senator Bernardi of overreacting and has urged people to consider the matter on its face value rather than responding emotionally.

"I think it's jumping the gun on what we on the Board of Taxation have been asked to do by the current Government." Warburton said. "What we'd be recommending is if there is some let me call it tweaking that can be done to our existing laws to meet the substance of the Sharia law then we would probably be looking to recommend that to the Government that we do that. But certainly no incentives or no new laws."

The tax law advisor also said that it is worthwhile to accommodate Islamic banking "if you're trying to be a centre for finance in this part of the world because after all a number of countries are already looking into this - or sorry not just looking into it, but actually utilising these laws - countries such as Korea and Singapore and Malaysia."  ISLAMTODAY