Bourses want three-year tax holiday

The country’s two stock exchanges have sought a three-year tax holiday on sales proceed of shares as well as exemption from capital gain tax on block shares in the fiscal year 2017-18. “We have demutualised stock exchanges under government pressure, but the capital market scenario did not improve as per expectations. That’s why we want a full tax holiday for next three years for the demutualised stock exchanges,” said Ahmed Rashid Lali, president of Dhaka Stock Exchange Brokers Association of Bangladesh. Lali, who was speaking at a pre-budget discussion with the National Board of Revenue on Sunday, also urged the government to increase tax-free amount of dividend for small investors to Tk1 lakh from from Tk25,000 in the upcoming budget. DSE Managing Director KAM Majedur Rahman said if the government keeps an option for tax waiver for the DSE share sales in the upcoming budget, it will help attract strategic partners and investors. He also demanded reduction of rate of Advance Income Tax (AIT) on trade volume from 0.05% to 0.015% and 10% tax on dividend as final tax liability. “Long term investment helps bring stability in the stock market. If the government considers the issues and introduces tax ceiling on holding share for years, it would encourage long-term investment,” said Rahman. Chittagong Stock Exchange Managing Director Saifur Rahman Mazumder proposed to the government for formulating strategic policy in the next budget by specifying the amount of market capital and number of listed companies in the stock markets. Both the CSE and DSE leaders urged NBR to reduce tax gap between listed and non-listed companies by 10% to encourage multinational and local big companies to be listed on the stock market. Former NBR Member Shahab Uddin was present as a representative from the SME Foundation. He demanded exemption from import duty on capital machineries related to SME sector and withdrawal of advance income tax for the sector businesses. Merchant Bankers’ representative Ahsan Ullah urged the NBR to impose corporate tax on final realisation. NBR Chairman Nojibur Rahman presided over the meeting, also attended by insurers’ representative Bashir Uddin Ahmed, Leasing Association representative Shantanu Shaha,  Benched Capital Equity Association representative Ziauddin Ahmed and NBR Member (VAT Policy) Jahangir Hossain.