Bill to accommodate Sharia Law

THE FINANCE Bill is expected to accommodate the principles of Sharia Law in a bid to attract business from the Islamic world.

The Minister for Finance will publish the Bill later today, and it is expected to include a number of sections designed to boost the Republic’s attractiveness to foreign investment.

Some provisions to be introduced tomorrow will be designed to ensure that Irish tax and financial law can accommodate the principles of Sharia Law, which stems from the teachings and principles of the Koran.

Sharia Law’s terms include a ban on charging interest and strict limits on insurance, as well as other restrictions on financial services and trading.

Banks and financial institutions have developed instruments that comply with the law, which include different forms of lease agreements, loans that allow the institutions to earn a margin on the debt and tradable, non-interest-bearing bonds, known as Sukuks.

Islamic equity funds are a growth industry and estimates of the worth of their assets run to €3.5 billion worldwide.

The Government is also likely to make further changes to the intellectual property tax breaks that it has been introducing in recent years, following consultations with industry.

However, a turf war between two departments is likely to prevent it extending research and development tax breaks to employers’ social insurance, a measure which multi-nationals and technology companies had been seeking.

Social insurance charges are paid to the Department of Social and Family Affairs, which does not want tax breaks to eat into a key revenue stream, sources say.