KUALA LUMPUR: Malaysia will exempt taxes for three years on fees and profits earned from non-ringgit Islamic bond deals distributed outside the country to boost the industry, Prime Minister Abdullah Ahmad Badawi said yesterday.

The exemption, effective for the 2009-2011 years of assessment, apply to fees and profits on arranging, underwriting, distributing and trading non-ringgit sukuk, Abdullah announced in the 2009 federal budget.

Malaysia wants to become a global leader in the $1 trillion Islamic finance industry. The country has the world's largest sukuk, market, with $66 billion or 62.6 per cent of global outstanding sukuk issuance as at end June this year.

The government also announced a double tax deduction for Islamic finance courses conducted by a Malaysian university to help overcome the shortage of industry experts.