Both the bourses of the country have proposed a cut in corporate tax for listed companies, in order to encourage multinationals and good local companies to go public.
The proposals were placed at a pre-budget meeting with the National Board of Revenue (NBR) at its conference hall in the city's Segunbagicha on Tuesday.
During the meeting, Dhaka Stock Exchange (DSE) proposed a cut in corporate tax for listed companies from 22.50 per cent to 17.5 per cent.
Besides, the premier bourse also proposed continuation of special facility on investment of undisclosed money in stock market by lowering tax rate on it to 5.0 per cent from existing 10 per cent.
Presided over by NBR member Md Masud Sadiq, the programme was also addressed by NBR members Zakia Sultana and Md Shamsuddin Ahmed, while representatives of financial institutions, insurers and two bourses - DSE and Chittagong Stock Exchange (CSE) - also spoke.
Referring to the system of 'not asking questions on source of income in investing on stocks after paying special tax' that has been removed from the draft Income Tax Law-2022, the CSE proposed including the facility in the draft law so that people could invest their legally earned but undisclosed money in stocks.
CSE also proposed that the revenue authority lower the corporate tax rate for listed companies from 22.5 per cent to 20 per cent.
CSE General Manager Md Ghulam Faruque said the gap of corporate tax between listed and non-listed companies should be widened so that companies with strong fundamentals get encouraged to go public.
Moreover, emphasis should be given on transparent corporate reporting, he said.
The port city bourse also sought an increase in the tax-free ceiling of dividend income to Tk 100,000 from the existing Tk 50,000.
Speaking at the programme, DSE Chief Operating Officer (COO) M Shaifur Rahman Mazumdar said in terms of legalising undisclosed money, the reduction on tax rate would increase the flow of such money directly to the national economy.
Emphasising the bond market expansion for long-term financing, he proposed removal of taxes on interest earnings on bonds similar to that of the zero coupon bonds.
However, responding to the proposal of DSE and CSE for continuing the black money whitening facility, NBR member Mr Sadiq said the beneficiaries of such a facility barely stood beside the revenue authority when it faced criticism for giving the option.
He said, "Those who benefited from the investment of undisclosed money can't be found when we (NBR) face criticism from different quarters of the country."
In the meantime, proposing the full removal of the existing 5.0 per cent gain tax on profit of insurance policyholders, Bangladesh Insurance Association (BIA) said the number of policyholders had been decreasing in the country due to the gain tax.
In the meeting, Bangladesh Merchant Bankers Association (BMBA) proposed lowering the corporate tax for listed companies to 15 per cent from existing 22.5 per cent as the existing rate hardly encourages companies to go public.
Besides, BMBA President Sayedur Rahman urged NBR to lower the corporate tax rate for merchant banks to 25 per cent from 37.5 per cent as these institutions pay taxes under the Large Taxpayer Unit (LTU).
He also claimed that it had been difficult for the country's 66 merchant banks to manage even the operating costs due to the sluggishness of the stock market caused by the pandemic.
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