Welcoming the budget 2016, Dhaka Stock Exchange (DSE) termed it a market-friendly as corporate tax cut for the listed firms will attract entrepreneurs for financing their businesses.
However, the DSE has urged the finance minister to re-consider the proposals in relation to demutualisation, which would help smooth transformation of corporatisation process and operation of the exchange.
“The proposed budget will bring dynamism in the market further,” said DSE Chairman Siddiqur Rahman Miah while giving DSE’s post-budget reaction at a press briefing yesterday.
He said a cut in corporate taxes will help entrepreneurs raise funds at low cost from the market for financing theirs business projects.
On Thursday, the new budget proposed that corporate tax rate would be cut from 40% to the existing 42.5% and for all other types of listed firms, corporate tax would be decreased to 25% from existing 27.5%.
The stock exchange has also welcomed a number of new measures introduced for the market development including raising tax-free income to Tk25,000 from Tk20,000, withdrawal of the existing provision of 10% deduction at source on income from share market by any company or partnership firm and allowing pension fund to invest in the stock market.
It also noted that the proposal of cancellation of 10% tax at source of interest of treasury bond and treasury bill will help revive the moribund bond market.
Some of the DSE proposals, which were ignored in the proposed budget, are providing five-year tax exemption facility for the demutualised DSE, reduction tax at source on share transactions to 0.015% from the existing 0.05% and enactment of Financial Reporting Act.
DSE Managing Director Swapan Kumar Bala said the five-year tax exemption will help the bourse operate and transform its corporatisation process smoothly. He said tax reduction of share transaction cost will enhance trade volume and related tax. Enactment of Financial Reporting Act will establish transparency and accountability of listed firms in making audit report, which will boost investors’ confidence, he said.
