NBR allows black money incapital mkt without question

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Doulot Akter Mala The National Board of Revenue (NBR) Monday cleared its position on accepting undisclosed money in the country's capital market without asking for its source in a bid to restore confidence of the investors. The board has sent the clarification to the Securities and Exchange Commission (SEC). In the clarification, signed by first secretary (policy) Tahmid Hasnat Khan, the revenue board said the NBR always played a supportive role for developing share market. In 2009-10, the revenue board provided the opportunity of investing undisclosed money in share market with an aim to encourage investment in this sector, the clarification said. On the similar ground, the opportunity has been given in the 2011-12 fiscal year on investment in shares of listed companies. The NBR will accept it without any question. It will not ask any question on source of the undisclosed money, it added. Talking to the FE Monday, NBR chairman Dr Nasir Uddin Ahmed said the NBR has sent the letter clarifying its position to SEC as the regulator is expected to offer a package Tuesday (today). Bangladesh Bank (BB) might also offer some opportunities for the benefit of small investors including reducing interest rates of the margin loan, he said. "We have already brought several changes in the tax measure to encourage share market investors. The NBR has reduced tax rates on share market commission," he said. A meeting was held today (Monday) with the finance minister to fix the package for revitalization of country's capital market, he added. Money whitening scheme of the government faced a blow this fiscal amid concern of the Asia Pacific Group on money laundering (APG) regarding acceptance of all types of undisclosed income, earned legally or illegally, without raising any question. Officials said the NBR did not change its order although there was strong recommendation to amend it and offer the opportunity for only tax-related matters. Last month, the NBR issued three separate SROs, restoring tax benefits for investors in stock market. NBR has reduced tax rates to 0.05 per cent that it deducts at source from stock exchange members (brokers) on transaction value of shares, debentures, mutual funds, bonds and securities, as was the practice before. Tax rate for brokerage houses was increased to 0.10 per cent in the budget for 2011-12 through Finance Bill. The revenue board also re-introduced tax rebate facilities on investment in shares, stocks, debentures, securities or mutual funds. Income of the issuers from mutual funds has also been exempted from tax through the SRO. Re-introduction of tax rebate on investment and tax benefit on mutual fund will be made effective retrospectively from July, 2011. So far no amount of undisclosed money has been invested in the stock market, availing the facility given under the tax measures for fiscal 2011-12 for disclosure of such money by paying a tax of only 10 per cent of the disclosed amount, NBR sources informed this correspondent. However, the deadline for such disclosure about undisclosed or black money will expire on June 30, 2012.