No immediate hike of BO account fees
Tuesday, 23 March 2010
Mohammad Mufazzal
The government has apparently backtracked from slapping Tk700 additional fees on annual maintenance of a share account, fearing its negative impact on the growth of the country's booming capital market.
The National Board of Revenue (NBR) has proposed raising the fees to Tk1,000 per beneficiary owner's account -- up from the existing rate of Tk300 -- in an effort to boost the government's revenue income.
The proposal was expected to be tabled at the weekly cabinet meeting on Monday. But officials said the Cabinet led by prime minister Sheikh Hasina did not place it on the meeting's agenda.
"It's nothing. It has not been placed in the cabinet meeting," Finance Minister Abul Mal Abdul Muhit, told the FE, when asked whether the cabinet discussed the issue.
The prime minister's finance advisor Dr. Mashiur Rahman said he was not aware of the proposal.
Sources said the NBR's proposal was dumped at the last moment after media reports on the fee-raising move sent the Dhaka Stock Exchange crashing last week.
"It's a good sign that the proposal has not been placed in the cabinet meeting. Otherwise, the market would see negative impact," Muhammad Yasin Ali, a member of the Securities and Exchange Commission, said.
The securities regulator did not openly oppose the NBR move. But in private members have expressed their dismay, saying the proposal would scare away small investors from the market.
The country has more than two million BO account holders and the slapping of additional fees would have made investment in the capital market costly, analysts said.
"There are a lot of small investors who would have found Tk1,000 annual maintenance fees disproportionately high. As a result, many would have surrendered their BO accounts," said an analyst.
The Central Depository Bangladesh Limited (CDBL), which keeps and opens BO accounts for ordinary investors, also expressed its ignorance of the fee hiking move by the NBR. "CDBL is not aware of the finance ministry's proposal," Shuvra Kanti Choudhury, Chief Executive Officer of CDBL, said.
CDBL said, on March 1, the total number of active BO accounts reached 2.24 million, with half a million entering the country's booming capital market in the past six months.
The government has apparently backtracked from slapping Tk700 additional fees on annual maintenance of a share account, fearing its negative impact on the growth of the country's booming capital market.
The National Board of Revenue (NBR) has proposed raising the fees to Tk1,000 per beneficiary owner's account -- up from the existing rate of Tk300 -- in an effort to boost the government's revenue income.
The proposal was expected to be tabled at the weekly cabinet meeting on Monday. But officials said the Cabinet led by prime minister Sheikh Hasina did not place it on the meeting's agenda.
"It's nothing. It has not been placed in the cabinet meeting," Finance Minister Abul Mal Abdul Muhit, told the FE, when asked whether the cabinet discussed the issue.
The prime minister's finance advisor Dr. Mashiur Rahman said he was not aware of the proposal.
Sources said the NBR's proposal was dumped at the last moment after media reports on the fee-raising move sent the Dhaka Stock Exchange crashing last week.
"It's a good sign that the proposal has not been placed in the cabinet meeting. Otherwise, the market would see negative impact," Muhammad Yasin Ali, a member of the Securities and Exchange Commission, said.
The securities regulator did not openly oppose the NBR move. But in private members have expressed their dismay, saying the proposal would scare away small investors from the market.
The country has more than two million BO account holders and the slapping of additional fees would have made investment in the capital market costly, analysts said.
"There are a lot of small investors who would have found Tk1,000 annual maintenance fees disproportionately high. As a result, many would have surrendered their BO accounts," said an analyst.
The Central Depository Bangladesh Limited (CDBL), which keeps and opens BO accounts for ordinary investors, also expressed its ignorance of the fee hiking move by the NBR. "CDBL is not aware of the finance ministry's proposal," Shuvra Kanti Choudhury, Chief Executive Officer of CDBL, said.
CDBL said, on March 1, the total number of active BO accounts reached 2.24 million, with half a million entering the country's booming capital market in the past six months.