NBR meets stakeholders April 26 to clarify terms

The revenue board has taken a move 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 following stakeholders' confusion.
Officials said the National Board of Revenue (NBR) took the initiative of clarifying the legal provisions to the stakeholders, after it had found lack of clarity as well as complexities over implementation of the new tax measure.
The tax authority has decided to sit with the stakeholders on April 26 to discuss ways of resolving the complexities created in this regard.
In this regard, NBR's income-tax wing has recently sent letters to 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).
The government introduced the measure in the current fiscal year's 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.
They have to deduct the tax on final and accumulated capital gain of the companies until June 30, 2015.
However, NBR has received several queries from stakeholders, as they found it difficult to implement the provision due to unavailability of actual information on net profit of the companies.
Bourse-insiders found the measure difficult to implement after they had discovered that many of the companies having more than one BO (beneficiary owner) accounts with different houses.  
Under the tax measure, the merchant banks, brokerage firms and financial institutions have to collect information on their own, by ascertaining net profit of the companies.
Some operators of the stock exchanges said the government needs to study the pros and cons of any tax measure before imposition to tide over possible problems in its implementation.
Until 2013-14, tax-collection procedure on capital gain of the companies from the stock market was different. They used to pay the capital-gain tax at the time of submission of tax returns at year-end on the basis of their declared net profit and gain.
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