DSE proposes 3.0pc capital gain tax on banks, NBFIs
Tuesday, 11 May 2010
Doulot Akter Mala
Dhaka Stock Exchange (DSE) Monday proposed the government to impose 3.0 per cent tax on capital gains of banks, insurance companies and non-banking financial institutions (NBFIs) but not to levy anything on small investors.
It has also proposed to introduce Tk 100 annually as surcharge against each BO (beneficiary owners) account to increase revenue collection.
The prime bourse has also proposed not to make TIN (taxpayers identification number) mandatory for opening BO account and reduce corporate tax rate which is highest in the region.
Banks and financial institutions have been paying 42.5 per cent corporate taxes.
The bourse also proposed to reduce the tax to 40 per cent for banks and NBFIs and reduce corporate tax on dividends to 15 per cent from 20 per cent.
DSE placed those proposals Monday to chairman of the National Board of Revenue (NBR).
Former DSE president Rakibur Rahman placed the final proposals for inclusion in the budget for fiscal 2010-2011.
Rakibur Rahman said: "Yes, DSE has submitted the final proposal to NBR. DSE board has approved the proposal on imposing gains tax on institutional investors."
This will be a win-win situation for both share traders and revenue board, he said adding that companies making hefty profits in share trading must pay tax on their earnings from the capital market.
"I am confident that the government will not make TIN mandatory for BO account and exclude the individual investors on tax measure," he said.
NBR chairman Dr. Nasiruddin Ahmed has also assured that there will be no fiscal measure in the next budget that will affect individual investors.
"We want a strong capital market. There will be no step that would hinder its growth," he told the FE Monday.
The revenue board also assured the DSE about NBR's cautious step on capital market, he said.
DSE urged the revenue board to treat the 10 per cent tax deducted at source on dividends as paid by the investors and not by the company.
The government will get Tk 250 million tax revenue if it imposes Tk 100 surcharge on each BO account as the number of accounts are 2.5 million now, the DSE proposal said.
Capital market will be seriously affected if the government make TIN mandatory for opening BO account, it said.
The bourse has paid Tk 900 million taxes to the national exchequer in July-April period of the current fiscal which was only Tk 260 million last year.
There are two kinds of taxes on share transaction. Stock exchange members have to pay tax at 0.25 per cent on their transaction while there is 10 per cent tax at source deducted from dividends of company.
Dhaka Stock Exchange (DSE) Monday proposed the government to impose 3.0 per cent tax on capital gains of banks, insurance companies and non-banking financial institutions (NBFIs) but not to levy anything on small investors.
It has also proposed to introduce Tk 100 annually as surcharge against each BO (beneficiary owners) account to increase revenue collection.
The prime bourse has also proposed not to make TIN (taxpayers identification number) mandatory for opening BO account and reduce corporate tax rate which is highest in the region.
Banks and financial institutions have been paying 42.5 per cent corporate taxes.
The bourse also proposed to reduce the tax to 40 per cent for banks and NBFIs and reduce corporate tax on dividends to 15 per cent from 20 per cent.
DSE placed those proposals Monday to chairman of the National Board of Revenue (NBR).
Former DSE president Rakibur Rahman placed the final proposals for inclusion in the budget for fiscal 2010-2011.
Rakibur Rahman said: "Yes, DSE has submitted the final proposal to NBR. DSE board has approved the proposal on imposing gains tax on institutional investors."
This will be a win-win situation for both share traders and revenue board, he said adding that companies making hefty profits in share trading must pay tax on their earnings from the capital market.
"I am confident that the government will not make TIN mandatory for BO account and exclude the individual investors on tax measure," he said.
NBR chairman Dr. Nasiruddin Ahmed has also assured that there will be no fiscal measure in the next budget that will affect individual investors.
"We want a strong capital market. There will be no step that would hinder its growth," he told the FE Monday.
The revenue board also assured the DSE about NBR's cautious step on capital market, he said.
DSE urged the revenue board to treat the 10 per cent tax deducted at source on dividends as paid by the investors and not by the company.
The government will get Tk 250 million tax revenue if it imposes Tk 100 surcharge on each BO account as the number of accounts are 2.5 million now, the DSE proposal said.
Capital market will be seriously affected if the government make TIN mandatory for opening BO account, it said.
The bourse has paid Tk 900 million taxes to the national exchequer in July-April period of the current fiscal which was only Tk 260 million last year.
There are two kinds of taxes on share transaction. Stock exchange members have to pay tax at 0.25 per cent on their transaction while there is 10 per cent tax at source deducted from dividends of company.