Treasurer Scott Morrison has defended tax changes announced in the May budget which will accommodate overseas sovereign wealth funds operating under Sharia law.
Campaigning in Mandurah with Canning MP Andrew Hastie, Mr Morrison said the changes, which would allow Islamic financing transactions to be treated as loans for Australian tax purposes, were not intended to benefit investors from any particular country.
But five of the top 10 sovereign wealth funds in the world, including Kuwait’s and Saudi Arabia’s, operate under Sharia compliant financing arrangements and avoid buying Australian assets because it costs them too much in tax to borrow from Australian banks.
The changes announced in the budget will remove this impediment.
“We changed the asset backed financing arrangements which have nothing to do with Sharia law, it’s about trying to have more flexible financing arrangements…