The state minister for planning Dr. Shamsul Alam has supported merchant bankers' demand of whitening undisclosed money in the capital market.
The state minister echoed the merchant bankers' demand on Wednesday at a post-budget press conference jointly held by Bangladesh Merchant Bankers Association (BMBA) and Capital Market Journalists' Forum (CMJF).
The BMBA made five demands at the press conference including the scope of whitening undisclosed money through the capital market subject to payment of 5.0 per cent tax.
"I agree with this demand (the scope of whitening undisclosed money). I support this demand," said the state minister Mr. Alam.
Joining the conference virtually as the chief guest, Alam said different governments including the caretaker and incumbent ones offered the scope of whitening the undisclosed money in main stream since 2001 amid criticisms.
"Many ones spoke about the amount of whitening undisclosed money. But we have found that a good amount of undisclosed money was whitened in different times," the state minister said.
He said the amount of whitening undisclosed money was up to Tk 100 billion and such amount is not insignificant as many ministries are not able to get such amount.
"Even the amount of subsidy offered in agriculture is Tk 90 billion. As a result, the amount of whitening undisclosed money is not insignificant," Mr. Alam said.
He said those who pay tax on regular basis can raise question about whitening undisclosed money from the moral point of view.
"Nevertheless, the scope was offered for the sake of greater interest. Always, there is a scope of forgiveness," the state minister said.
The BMBA president Md. Syadur Rahman said undisclosed money will facilitate the country's economic growth if the scope of whitening such money is allowed subject to payment of 5.0 per cent tax.
He also demanded the consideration of advance tax charged on dividend as final settlement.
They made the demand as 10 per cent tax is charged while disbursing dividend and later the tax payers have to pay tax while submitting tax returns.
"It's double taxation. In that case, the advanced tax should be considered as final settlement," said the BMBA president.
The merchant banks pay corporate tax at the rate of 37.5 per cent and the rate is 27.50 per cent for other general companies.
"We are urging the government to reconsider our demand of fixing corporate tax at 27.50 per cent for the merchant banks as many of the banks are struggling to bear operational expenses," said the BMBA president Mr. Rahman.
Presently, the gap between the rates of corporate tax paid by listed and non-listed companies is 7.50 per cent.
The BMBA said the tax gap between the rates of listed and non-listed should be increased to encourage the companies having good fundamentals to go public.
In that case, the corporate tax for the listed companies should be reduced to 15 per cent.
In its proposed budget for the fiscal year 2022-23, the government announced 20 per cent corporate tax instead of 22.5 per cent for the companies that issue shares worth more than 10 per cent of their paid-up capitals through IPO (initial public offering).
And the 22.50 per cent corporate tax rate for the companies that issue shares worth 10 per cent or less has been kept unchanged.
The BMBA said the 7.5 per cent tax gap is not enough to allure the companies having good fundamentals to public.
The BMBA also said the VAT rate for the listed and non-listed companies is the same.
"Presently, many companies are availing different facilities without going public. Our demand is the reconsideration of 10 per cent VAT for the listed companies," said the BMBA president.
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