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DSE capital gain tax likely at 5.0pc

FE Report | September 13, 2018 00:00:00

There has been a reduction in capital gain tax to 5.0 per cent from 15 per cent on the Chinese funds for the Dhaka Stock Exchange (DSE) shareholders.

Finance Minister AMA Muhith declared the tax cut in capital gain from the Chinese partner of the country's premier bourse on Wednesday.

To avail it, the DSE TREC (trading right entitlement certificate) holders should invest the funds in the capital market for three years.

Mr Muhith was speaking at the inaugural ceremony of the silver jubilee of the securities regulator.

Prime Minister Sheikh Hasina attended the programme as the chief gust.

"I'm announcing that the government would reduce capital gain tax to 5.0 per cent from 15 per cent if the DSE shareholders invest their funds in the capital market for three years," Mr Muhith said.

Section 53 (N) of the Income Tax Ordinance says the government will get tax at the rate of 15 per cent on capital gains of the DSE TREC holders from the Chinese funds for selling a 25 per cent stake.

Under the demutualisation move, the DSE received Tk 9.62 billion from its Chinese strategic partner on September 03.

After depositing Tk 150 million as stamp duty fee, the funds stood at Tk 9.47 billion.

Sources said 250 shareholders are eligible to receive Tk 37.88 million each.

The TREC holders, whose costs of acquisition of respective 25 per cent shares will be less than the Chinese funds, will pay tax at 15 per cent rate.

Earlier, the DSE made a plea for tax exemption on capital gains of the funds to be received from the sale of a 25 per cent stake to its partner.

The holders said they would invest the fund in the capital market if the capital gain tax is exempted. Mr Muhith said the stock exchange will have to come forward with a specific plan to invest the funds in the capital market for three years.

He also spoke in favour of carrying out responsibility by the incumbent commission of the securities regulator for two years.

Exhausting all formalities, the Chinese consortium of Shenzhen Stock Exchange and Shanghai Stock Exchange became the strategic partner of the DSE purchasing its 25 per cent stake.

A representative of the consortium has also been included in the DSE board.


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