DSE hails budget

Dhaka Stock Exchange has hailed the budgetary proposal to exempt the demutualised stock exchanges from paying taxes for the next five years "This is a positive message for the stock exchanges", said Swapan Kumar Bala, managing director of DSE. The stock exchanges that were turned into profit-oriented companies through demutualisation last year will be exempted from paying taxes for the next five years as per the latest budget proposal. Bangladesh's stock exchanges, before demutualisation, were non-profit cooperative organisations owned by the exchange members, and were not subject to corporate taxation. But demutualisation, a way of separating bourse management from ownership, converted the bourses into profit oriented companies owned by shareholders, and 37.5 percent corporate taxes now apply to them as non-listed companies. The demutualisation process also allows for alternative business models and operational efficiency. “We can now utilise the otherwise taxable money for capacity building, infrastructure development and introduction of new products to attract strategic investors to the bourse,” he said. “The tax exemption will also not affect the government's revenue collection, as the bourses have not paid any taxes yet, being non-profit cooperative organisations before.” On the hike in tax-free dividend income, Mr Bala said it will reduce the investors' tax burden. “But the investors will have to get tax identification numbers to enjoy the opportunity.”