Call for a 15% corporate tax differential between listed and unlisted companies

Stakeholders also expect to allow undisclosed money in the capital market until next fiscal year, taxed at 5%

Stock market players expect a 15% corporate tax gap between listed and unlisted companies in the next national budget for fiscal year 2021-2022 in order to attract healthier companies to markets. scholarships.

Currently, the difference is 7.5% on average.

The corporate tax rate for listed companies is 25% and for unlisted companies it is 32.5%.

They also expect to allow undisclosed money in the capital market until the next fiscal year, taxed at 5%.

A reduced corporate tax rate will encourage multinationals and good companies to list on the stock exchanges, said Mr. Shaifur Rahman Mazumdar, chief operating officer of the Dhaka Stock Exchange (DSE).

Mazumdar’s comment came during a pre-budget meeting with the National Board of Revenue at its headquarters in Dhaka.

Listed companies are required to fully disclose their financial and corporate governance measures.

Read also – DCCI calls for progressive reductions in corporate tax for 3 consecutive years

Subsequently, if the number of listed companies can be increased, the total government revenue collection will also increase, Mazumdar said.

The DSE also proposed a reduced tax rate for small and medium-sized enterprises (SMEs) to 10% for five years from the date of registration.

Mazumdar has also proposed to allow listed company status for companies whose securities are listed on alternative trading boards.

The DSE has also sought to reduce withholding tax by up to 0.015% on the value of the transaction.

The first exchange also proposed to increase the limit on investors’ tax-exempt dividend income to Tk2 lakh from the existing Tk50,000.

But the DSE has also sought to deduct taxes from non-residents.

In accordance with Article 56 (1) of the Income Tax Ordinance, a capital gains tax of 15% is applicable for non-residents.

“We would like to propose not to apply Article 56 (1) in case of capital gains on share transactions. This will encourage foreign non-residents to invest in the capital market, ”Mazumdar added.

Md Sayadur Rahman, chairman of the Bangladesh Merchant Bankers Association (BMBA), called for corporate tax cuts for listed companies of 20%.

Currently, corporation tax is between 25 and 40% depending on the type of business.

Rahman then called for a reduction in corporate tax rates for investment banks from 12.5 percentage points to 25%.

He also proposed to reduce the value added tax by 10% for listed companies.

The DSE and BMBA have also proposed to allow undisclosed money in the capital market until the next fiscal year, taxed at 5%.

They said the deadline for investing undisclosed money in the capital market upon payment of a 10% tax would expire on June 30.

This special tax treatment facility could be extended until June 30, 2022, he said, urging the government to reduce the rate to 5%.

Sharif Anwar Hossain, president of the DSE Brokers Association (DBA), said if the black money laundering program were available in fiscal years 2021-22, the capital market would be strengthened next year.

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