2018-04-04 10:17:46 BdST
DSE backs corporate tax cut demand
The government is willing to reduce the corporate tax rates in line with the proposals coming from various quarters.
"The government wants to slash the corporate tax rates, but it's not certain when it will happen," said National Board of Revenue (NBR) Chairman Md. Mosharraf Hossain Bhuiyan.
He also termed the upcoming fiscal year (FY), 2018-19, a 'transition period' for the government.
The NBR chief made the remarks at a pre-budget meeting with the representatives of both the country's bourses, leasing and finance companies and insurers on Tuesday.
Managing director of Dhaka Stock Exchange (DSE) K A M Majedur Rahman, chief financial officer Abdul Matin Patwary, and deputy general manager of Chittagong Stock Exchange (CSE) Md. Ghulam Faruque, among others, were present at the meeting.
The bourses placed a set of budgetary proposals, including full income tax waiver for another FY, to enhance their capacity in the post-demutualisation regime.
They have sought the waiver to facilitate implementation of different projects, taken to diversify the capital market through introduction of new products.
Both the stock exchanges were offered full income tax waiver for two fiscals -- 2016-17 and 2017-18.
Besides, DSE and CSE proposed reduction of tax at-source to 0.015 per cent from the existing 0.05 per cent on commission, realised by the stock brokers against transaction of shares, debentures, mutual funds, or securities.
In this regard, the NBR chairman said the investors are not getting benefits although the government is facilitating the stock brokers.
"NBR may reduce tax rate on brokerage commission, if the exchanges can ensure that the investors will be benefited by this," he added.
CSE has proposed to reduce corporate tax of the listed companies to 20 per cent from the existing 25 per cent.
DSE has sought the scope of purchasing national savings certificates as safe investment tools.
In its budget proposals, DSE has also sought tax exemption on capital gain derived from transfer of shares.
The premier bourse said for the greater interest of the capital market and for completing the demutualisation scheme successfully, no tax should be imposed on any profit or gain from the transfer of 60 per cent shares held in block account of the exchanges.
The current capital gain tax for the transfer of shares held by the exchange's shareholders is 15 per cent.
DSE is set to sell its 25 per cent shares, out of 60 per cent, to a Chinese consortium selected as a strategic partner, subject to approval of the securities regulator.
Supporting the demand of giving waiver from gain tax on transfer of shares, the DSE MD said the premier bourse has come to the present position by overcoming many hurdles on its way through enormous efforts by its shareholders during the last 60 years.
DSE and CSE have also proposed to increase the investors' tax-free dividend income limit to Tk 0.1 million from the existing Tk 25,000.
BLFCA wants tax exemption of profits earned from zero-coupon bonds
Bangladesh Leasing and Finance Companies Association (BLFCA), in its proposal, demanded reduction of corporate tax rate for the publicly-traded companies to 25 per cent from the existing 40 per cent.
They also said corporate tax rate for the non-publicly-traded companies should be reduced to 35 per cent from the existing 42.5 per cent.
BLFCA has made another tax exemption proposal for banks, insurance companies and financial institutions from the income derived from zero-coupon bond for making this instrument more popular.
Presently, any income from zero-coupon bond, received by a person, other than banks, insurance companies and financial institutions, is exempted from payment of tax.
The insurance companies have sought waiver of 15 per cent VAT and 5.0 per cent tax-at-source, charged on their agents.
In this regard, the representative of insurance companies said VAT is imposed on delivery of goods and services, but the insurance agents get commission through their labour.
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