Assistant Treasurer Nick Sherry has released the terms of reference for a tax review intended to support strong growth in demand for Islamic insurance, banking and finance products.

The Board of Taxation was last month charged with analysing Australian tax law to ensure legislation does not inhibit the provision of Islamic financial products.

A Ernst & Young report compiled in 2008 forecast the global Islamic “takaful” insurance market alone could be worth as much as $US15 billion ($18 billion) by 2018.

Senator Sherry says the review will create a “fair and level playing field” for Islamic financial products provided within the local market.

“Attracting more of these funds and investments will develop business and boost jobs in Australia,” he said.

The board will make recommendations on federal laws and findings on state and territory laws that may impede local provision of Islamic products. The review will also evaluate similar developments in Europe and Asia.

It follows an Australian Financial Centre Forum recommendation to ensure local Islamic finance products have parity with conventional products.

The final report is due by June next year.