Capital gains tax to hurt small investors
Saturday, 5 June 2010
'What is capital gains tax?' It is a tax charged on capital gains, the profit realized on the sale of a non-inventory asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, heavy machinery used in industrial production procedure, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations.
Most of the developed countries have this tax system (with different rates and different circumstances) but none of the developing countries (e.g. Bangladesh) have it with the exception of India (2008).
If the government imposes the capital gains tax it will be giving small investors a big shock as our share market is still dominated by retailers. We have to make our share market strong rather than making it vulnerable by imposing various taxes.
I would like to say that the gains tax might help increase the government revenue only for a short time, but for the long run it won't be worthwhile. The reason is once the investors are discouraged they may reduce their investment in the stock market, which may affect our economy. So, my request to the government will be to focus on the existing problems of taxes from the people who are deliberately avoiding payment of tax from their incomes instead of demanding it from those who are unemployed and are involved in the stock market.
Bodiuzzaman Sohel
Student of Department of Business Administration, East West University
E-mail: sohel18ub@yahoo.com
Most of the developed countries have this tax system (with different rates and different circumstances) but none of the developing countries (e.g. Bangladesh) have it with the exception of India (2008).
If the government imposes the capital gains tax it will be giving small investors a big shock as our share market is still dominated by retailers. We have to make our share market strong rather than making it vulnerable by imposing various taxes.
I would like to say that the gains tax might help increase the government revenue only for a short time, but for the long run it won't be worthwhile. The reason is once the investors are discouraged they may reduce their investment in the stock market, which may affect our economy. So, my request to the government will be to focus on the existing problems of taxes from the people who are deliberately avoiding payment of tax from their incomes instead of demanding it from those who are unemployed and are involved in the stock market.
Bodiuzzaman Sohel
Student of Department of Business Administration, East West University
E-mail: sohel18ub@yahoo.com