The Dhaka Stock Exchange (DSE) has proposed to reduce corporate tax rate with another 10 points budget proposals in the upcoming budget for the fiscal year (FY) 2020-2021.
The DSE sent their budget proposals to the Finance Minister AHM Mustafa Kamal, a press release said here today.
“We request to include the tax incentive proposals for DSE, TREC-holders, general investors and listed companies in the upcoming national budget 2020-21 to ensure sustainability, viability, credibility and liquidity of the capital market”, it said.
The bourse also sought tax exemption for itself for an extended period of 10 years from 2015 to 2025.
The DSE also urged to offer special tax treatment (5 percent) in respect of investment in listed securities subject to retention of investment for a period of two years.
In its proposals, the DSE also urged the government to allow payment of interest or profit of listed bonds without deducting tax at source similar to government Treasury bond.
The DSE also proposed to reduce standard VAT rate to 9.0 percent from the existing 15 percent.
The prime bourse also urged to change in the exemption scope of stamp duty (1.5 percent) to dematerialized securities instead of listed securities.
The prime bourse proposed to reduce tax rate of publicly traded company to 20 percent from the existing 25 percent, other than banks, insurance and financial institutions.
“Tax rate of the publicly traded bank, insurance and financial institutions (except merchant bank) should be reduced to 32.5 per cent from the existing 37.5 per cent”, the release said.
The DSE also proposed to increase dividend income exemption limit to Tk 200,000 from the existing Tk 50,000 with a view to spur market condition.
"Considering the present market scenario, small investors should be allowed for tax exemption up to Tk 200,000 on dividend income as it will help them invest in capital market which will ultimately enhance the capital market growth and development," the DSE proposals said.
'If the limit is increased, small investors will be benefited as they have suffered a lot due to market turmoil in recent years,' it
said.
The DSE also urged to increase 10 percent tax waiver period of a newly listed company to three years from the existing one year and allow 10 percent income tax waiver for newly listed (company) bonds for a period of three years.
The DSE also proposed inclusion of Covid-19 charities as tax allowable expenses.
The lockdown impact on our economy and market has brought new challenges with existing ones for the performance of DSE.
From the point of impact TREC-holders, investors, listed companies and other stakeholders will be in years behind now in their journey in spite of being paramount in respect of employment, government revenue, contribution to the GDP and other opportunity cost, said the DSE.
The DSE also proposed to reduce advance income tax (AIT) rate of members to 0.015 per cent from the existing 0.05 per cent from main board.
It also proposed for zero AIT collection from members on the transactions of newly created SME platform.
"We strongly believe that the government shall consider and waive the tax from transaction of securities listed under SME platform of the Exchanges to facilitate the sustainable development of SMEs" the proposal said.
The DSE also sought clarification on applicability of zero tax collection from member of stock exchanges for transactions of government treasury bill and other bonds in light with the amendment in the Finance Act 2013 in order to ensure sustainable development of bond market in line with the direction of the government.
