The country's stock market is likely to get a major boost as the government, in its proposed national budget, allowed investment of the undisclosed money in the capital market.
According to the budget proposals, people who would avail the facility to invest in securities such as stocks, mutual funds and bonds would have to pay only 10 per cent tax within 30 days of their investments.
"The individual taxpayers can invest money in the capital market between 1st July 2020 and 30th June 2021 and show it in their tax returns on paying tax at a rate of 10 per cent on the value of the investment subject to satisfying certain conditions," Finance Minister AHM Mustafa Kamal said while unveiling the budget for fiscal year 2020-21 on Thursday.
However, the untaxed money invested in the capital market would face a lock-in period of three years and no authorities, including the income tax authority, will raise any questions in this regard, according to the budget proposals.
Asked for comment, President of the DSE Brokers Association Sharif Anwar Hossain said such an opportunity would have a positive impact on the stock market.
"Investments in the capital market have declined remarkably due to the Covid-19 pandemic. The market might see a good flow of funds to stocks due to the scope of investing undisclosed money in the capital market," he said.
In his budget speech, Finance Minister Mustafa Kamal said individual taxpayers can make any disclosure of undisclosed cash, bank deposits, savings certificates, shares, bonds or any other securities between July 1, 2020 and June 30, 2021 on paying taxes at a rate of 10 per cent on the value of the said declaration; and no authorities, including the income tax authority, can raise any question about such declarations.
He also said the ongoing crisis caused by the coronavirus outbreak and the ensuing changed economic circumstances demand that the mainstream economy of the country be brought back to track and the people be given the opportunity to resume their economic activities.
In his immediate budget reaction, Rakibur Rahman, a DSE director, said, "The capital market may get a new lease of life as the government allowed investments of undisclosed money in the stock market."
He noted that the investors who have been badly affected by the impacts of coronavirus pandemic would also benefit.
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