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3.4.4 SUKUK ISSUANCES IN NON-OIC COUNTRIES
To allow sovereigns to issue sukuk, changes have been made to the countries’ tax and legal
frameworks. For example, the UK’s Finance Act 2009, which received royal assent on 21 July
2009, removed the tax barriers that had rendered Shariah-compliant financial products less
tax-efficient than their conventional counterparts. The enactment of the legislation had been
envisaged to promote the UK’s ambition of becoming a leading international centre for Islamic
finance. A key component adopted by the UK in enabling Islamic finance is the embedding of
the ability to allow future adjustments by way of statutory instruments (or other forms of
guidance), without necessarily requiring primary legislation (SEDCO Capital, 2014). This
approach demonstrates the government’s willingness to make any adjustment to facilitate
other types of issues, showing that it has both the legislative authority and the tools available
to do so. Unfortunately, there has been no further development to date in the UK’s sukuk
market.
France and Luxembourg have also enacted tax regulations that specifically show how Islamic
financial products are treated according to their tax codes. Elsewhere, Singapore has made
additional amendments to its income tax regulations to clarify in detail how Islamic banking is
handled. Although there have been efforts by governments and regulators to develop the
necessary infrastructure, the number of issues has been rather few. Table 3.12 indicates the
total number of domestic sukuk issuances while Table 3.13 shows the number of international
sukuk issuances by non-OIC countries (outside the Arab, Asian and African regions).
Table 3.12: Number of Domestic Sukuk Issuances by Country (2001-2016)
Europe Number of sukuk issues Amount (USD million) % of the total value
France 1 1 0.0
Germany 2 83 2.8
Luxembourg 3 280 9.0
UK 9 1,368 44.1
US 5 1,367 44.1
Total 20 3,099 100.0
Source: IIFM (2017, July)
Table 3.13: Number of International Sukuk Issuances by Country (2001-2016)
Europe & Others Number of sukuk issues Amount (USD million) % of the total value
Germany 1 123 100.0
Source: IIFM (2017, July)