The Constitution and Islam: Are Tax Reforms Possible to Facilitate Islamic Finance?
Griffith University - Griffith Business School; Griffith University - Griffith Law School
University of South Australia - Division of Education, Arts and Social Sciences
June 20, 2011
Revenue Law Journal, Vol. 20, No. 1, pp. 1-36, 2011
Islamic banking and finance is emerging in global financial markets and governments seek to facilitate it. This article focuses on whether it is constitutionally possible for Australia to implement reforms to facilitate faithbased financial transactions.
There have been calls for Australia to become a financial hub – particularly in South East Asia. One aspect of this is the recognition of Islamic finance as an alternative in the marketplace. This would include ensuring that tax laws are synchronised with Islamic tenets on financial transactions and do not hinder such alternatives.
Being different to conventional finance, Islamic finance has attracted interest and scepticism, partially because of the lack of understanding and the paucity of academic research on the subject. While the idea of facilitating faith-based finance may seem economically rational, a fundamental question needs to be addressed: is it appropriate for Australia’s tax laws to be amended to facilitate what may be construed to be the furtherance of any religion? This article considers the theoretical considerations of tax and religion and assesses the implications of Islamic finance in light of Australian constitutional law.
Number of Pages in PDF File: 38
Keywords: islamic finance, islamic banking, tax, religion, constitution
JEL Classification: K34, E44, E62, F30, G8
Date posted: June 23, 2011