The South Korean government will again push forward a bill to introduce sukuk, or Islamic bonds, a senior finance ministry official said on Thursday, after lawmakers rejected the proposal in December. "We will give one more try to get a special tax bill for Islamic bond issuance passed in parliament in February," the official told reporters, declining to be identified until an official announcement is made.
The finance ministry had proposed a revision to the tax code with the aim of treating sukuk as bonds so that South Korean issuers could receive the same tax advantage as those applied to conventional bond issuers.
Islamic finance does not allow lending in return for interest, so borrowing via instruments such as sukuk typically involves the sale and purchase or lease of special assets.
The official hinted at an adjustment to the original revision, but declined to elaborate.