The National Board of Revenue (NBR) on Sunday issued the much anticipated Statutory Regulatory Order (SRO) on gains tax reduction for fundsto be received from the Chinese strategic investor against the sale of 25% stakes of the Dhaka stock Exchange.
The SRO reduced the gains tax to 5% on six conditions, including investing the fund in stocks for a minimum period of three years.
The beneficiaries of the order have to open designated bank accounts and new beneficiary owner’s accounts, the SRO said.
The whole of the amount to be received from the Chinese investors has to be transferred to their designated bank accounts. The amount must be invested in the share market within six months from the date of fund deposit in their respective bank accounts, the SRO further said.
The invested amount cannot be withdrawn within three years from the dates of their investment in the capital market, it elaborated.
Earlier, Finance Minister AMA Muhith in his approval said the amount received from the Chinese strategic investors against the sale of 25% DSE stake will be subject to only 5% gains tax, instead of 15% if the amount is invested in the capital market for a minimum period of three years.
The DSE received Tk947 crore from the sale of 25% of its stake. Stakeholders think the policy decision would increase the cash inflow into the market as well as help the government to earn more tax from the bourse.
Speaking to the Dhaka Tribune, a good number of shareholders of DSE said if the government reduces the capital gains tax to 5%, they will make the full investment of the amount received from the sale of shares to Chinese investors in the capital market.
The divestment of 25% share of DSE was mandatory for the DSE management as the Demutualisation Scheme 2013 stipulates. The Tk947 crore was already distributed among 237 DSE shareholders.
In becoming strategic partner, the Chinese Consortium offered to develop SME market, product diversification and technology upgrade. It also offered technical support of Tk307 crore.