Listing generates an independent valuation of the issuer company by the market which maximizes the wealth of the sponsors through transactions in the stock market, said Mezbauddin Md. Jibon Chowdhury, Managing Director and CEO of Ahkam and Associates Business Limited in an interview with Bangladesh Post.
Jibon Chowdhury said the company also gets to avail a mechanism for the sponsors to exit their investment. An instant market is available for selling shares which is not available for a non-listed one.
A highly experienced expert in the field of tax consultancy and capital market, Jibon Chowdhury replied to a set of queries made by this correspondent which widely covered the issues of market intervention by the listed companies, it’s problems, prospects and possible solutions to them.
A Businessman turned Politician, Mezbauddin Md. Jibon Chowdhury is currently the Chairman of Explorina Bangladesh Ltd., Managing Director of Taxsense Limited, Corporate Adviser of Bangladesh Eye Hospital and 'Super Tea' , an affiliate of Synthia Groupn.
The excerpts of his interview is as bellow:
Bangladesh Post: First of all , could you please brief us about how the companies become benefited of being listed as a Public Limited Company?
Jibon Chowdhury: There are numerous benefits for the company of being listed as a public limited company. The listed company gets the opportunity to access capital and raise capital for organic growth. Listing generates an independent valuation of the issuer company by the market which maximizes the wealth of the sponsors through transactions in the stock market. The company also gets to avail a mechanism for the sponsors to exit their investment. An instant market is available for selling shares which is not available for a non-listed one. The sponsors can sell a portion of their shareholdings at market price which will aid them in meeting their liquidity requirement. Listing the company enhances lenders’ perception and they rate the issuer company positively. They also receive wide exposure to products and services and enhance corporate brand image. In terms of Tax benefits, listed companies get the opportunity to avail 22.5% tax rate whereas non-listed companies get a 30% tax rate. In case of easy exit and liquidity for sponsor directors, listed company buyers are easily available in the market whereas non-listed company buyers are hardly found at a reasonable price. The enterprise value can also be determined. The benefits also include easy future financing where the company can raise capital from the market through: Rights share, Repeat public offering, Preference share, Zero-coupon bond, Perpetual bond etc.
Bangladesh Post:What should the perfect characteristics of a tax firm?
Mezbauddin Md. Jibon Chowdhury: The first quality of a perfect organization is the ability to pay close attention to the problems of its esteemed clients, recognize the significance of those problems, and ensure that the problems are addressed appropriately. The organization must also have reliable organizational structures and problem-solving abilities and must be able to communicate effectively, clearly, and concisely. Among his key characteristics are professionalism and integrity. The most crucial factor is accountability. Since human beings are fallible, it takes bravery to own errors. The confidentiality and security of all clientinformation must be guaranteed first and foremost.
Bangladesh Post: Now please brief us about your plans for the future.
Jibon Chowdhury: We wish to make our business into a top-tier organization. For that reason, we are collaborating with a group of young individuals. In our company, workers with that kind of expertise are hired. I am moving forward in this manner. Thank God, we have a large clientele. Same desire to make their home-grown businesses into global names similar to multinational corporations like KPMG and Deloitte.
No discrimination, no division—this is the aim and goal of my politics—and there will be one nation, one country, and one goal in the country.
Bangladesh Post: One of the best performing businesses in the nation that handles corporate tax and VAT is Taxsense Limited. And why are you currently involved in politics?
Jibon Chowdhury: The Greek philosopher Aristotle said, "if inequality and injustice increase in society, then everyone should enter politics except the cowardly and
selfish." One thing, though: the word "politician" refers to a representative of the people. However, the voice of the common peoples may not always be heard. They appear to be perpetually absorbed in everyday issues.
To be heard, this voice needs to be politicized. However, in response to popular demand, the government will provide for their fundamental necessities, take care of their security, and foster a business climate. To make these ordinary people's ambitions come true, remarkable people are needed.
Politics, in my opinion, is the ideal platform. This makes it feasible to speak with the appropriate person at the appropriate time. This is the reason I entered politics.
Bangladesh Post: How can the amount of income tax returns submitted and VAT collected be increased?
Jibon Chowdhury: We must first realize that broadening the tax base—that is, the region where taxes are collected—is necessary in order to enhance revenue collection. In this regard, NBR should take action and gradually put it into practice. For instance, the introduction of the Digital Income Tax Audit System; the widespread use of an online system for tax deduction at source; the launch of "E-Challan" in all cases for online tax payment; the online filing of Value Added Tax (VAT) or VAT returns 100% online; the expansion of the tax and VAT collection base; increasing the effectiveness of tax collectors and streamlining and automating the tax payment process. The actions outlined above have already been taken into consideration by NBR.
Additionally, numerous economic "growth centers" have sprouted up in rural areas' villages. Some people have the financial means to pay taxes. Taxes can be taken from them to increase revenue also. There are tax offices at the moment in 100 Upazilas. Opening tax offices in every Upazila in the nation will increase revenue.
By providing services at the doorsteps of reputable taxpayers, the majority of individuals should be encouraged to pay taxes. Online confirmation of VAT returns will lessen harassment, and business owners will find it simple to pay VAT returns. VAT collection will go more quickly.
Individual taxpayers can already complete income tax forms online from the comfort of their own homes. This is a fantastic initiative. The taxpayer will join the website after registering and file the return while seated at home. The system of the tax department will automatically prepare the return even if just a portion of the information relating to income and expenses is provided.