Stock market stakeholders want to do it on their own

Doulot Akter Mala | Published: April 27, 2015 00:00:00 | Updated: November 30, 2024 06:01:00

Country's stock-market stakeholders urged the government Sunday to amend a newly-introduced legal provision to allow companies to deduct, on their own, the taxes from their capital gains earned from bourses.Â Â Â Â Â Â Â Â Â Â
They argued that authorising companies and partnership firms to estimate their respective realised gains from the share market would make the tax measure operationally feasible.
Under the new fiscal measure, custodian banks, merchant banks, financial institutions or Trading Right Entitlement Certificate (TREC)-holder companies are to deduct the gains tax.
Leaders of the Securities and Exchange Commission (SEC), Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), Association of Trading Right Entitlement Certificate (TREC) Holders and Central Depository, Bangladesh Limited (CDBL) mooted the proposal before the income-tax wing of the National Board of Revenue at an internal meeting.
The revenue board arranged the meeting to clarify the legal provisions on deduction of tax at source on capital gains of companies and partnership firms from the stock market.
Implementation of the new tax measure has been halted after stakeholders faced complexities in assessing realised gains of companies.
The NBR introduced the tax measure in the current fiscal year (FY) budget, slapping 10 per cent tax at source on capital gains that custodian banks, merchant banks, financial institutions or Trading Right Entitlement Certificate (TREC)-holder companies have to deduct from the companies and partnership firms.
As per income-tax provision, the stakeholders have to deduct the tax on final and accumulated capital gains of the companies until June 30, 2015.
Both the taxmen and stakeholders listed the unavailability of actual information on net profits of companies from share market as a major problem, said a meeting source.
Officials said the tax measure had been slapped as final settlement where a company can enjoy 10 per cent tax rate on its income from capital gains while the corporate-tax rate is 35 per cent.
Swapan Kumar Bala, Managing Director (MD) of Dhaka Stock Exchange (DSE), said the companies can make statements with details of their net profits from share market to the authority concerned to make the process simpler.
Some 9,791 companies have Beneficiary Owners (BO) account out of 3.2 million total BO accountholders. Many of the companies have more than one BO (beneficiary owner) account with different houses. Â
"It is difficult to calculate the whole year's realised capital gains of a company from share market," he said to hammer home his point for a change.
In the meeting, SEC also proposed that the income-tax authorities should not impose a tax measure that affects the stock market.
Currently, the merchant banks, brokerage firms and financial institutions are required to collect information on their own by ascertaining net profits of the companies.
doulot_akter@yahoo.com