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CSE: Withdraw lock-in mechanism for investing undisclosed money

CSE also urged a reduction in corporate tax for listed firms

Update : 17 Jun 2020, 09:45 PM

The Chittagong Stock Exchange (CSE) on Wednesday urged the withdrawal of the lock-in mechanism on investing undisclosed money in the capital.

The stock exchange Chairman Asif Ibrahim placed the demand during a virtual press briefing on the day. 

On Thursday, Finance Minister AHM Mustafa Kamal tabled a national budget of Tk568,000 crore in parliament for the coming 2020-21 financial year.

The proposed budget allowed investment of money from undisclosed sources in the stock market on condition that the investment be made with a 10% tax and be put under a three-year lock- in period. 

CSE also urged a reduction in corporate tax for listed firms.

Its chairman Asif Ibrahim said the minimum corporate tax rate for listed companies should be reduced to 20% from the existing 25%.

A reduction in the corporate tax rate will help generate more revenue for the government, he added.

In the budget proposal, the government has proposed a reduction of 2.50% corporate tax for non-listed companies. 

The stock exchange demanded reducing source tax on share transactions to 0.015% from the existing 0.05%, considering the current volatile state of the market.

Commissioner of the Bangladesh Securities and Exchange Commission (BSEC) Professor Dr Mizanur Rahman, CSE director Barrister Anita Ghazi Islam, Md. Sayadur Rahman and its managing director Mamun-Ur-Rashid were also present at the press conference. 

Asif Ibrahim also demanded a five-year tax exemption for the CSE to help attract strategic investors. 

"If the income of newly-listed companies is kept tax-free for five years, the non-listed companies will be encouraged for listing," he remarked.

BSEC Commissioner Mizanur Rahman said the floor price instruction was given due to a special situation.

"However, like everyone else, we want free and open transactions on the stock market," he observed.

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