The association requested for reducing listed companies’ corporate tax to 20 percent from existing 25 percent and that for non-listed companies to the proposed level of 32.5 percent from 35 percent
Bangladesh Merchant Bankers Association (BMBA) has requested the government to reconsider five crucial points for the capital market before finalising the national budget.
In its letter to Finance Minister AHM Mustafa Kamal on Sunday, the association of the country's investment bankers said the proposed opportunity to invest undisclosed money into the capital market should be free from the condition of three-year lock in. Because, other alternatives like real estate, bank deposits, cash holding, savings certificates have nothing like this.
The BMBA also requested the government to widen the gap of corporate tax between listed and non-listed businesses instead of existing proposals for narrowing the gap to 7.5 percentage points from 10 percentage points.
The association requested for reducing listed companies' corporate tax to 20 percent from existing 25 percent and that for non-listed companies to the proposed level of 32.5 percent from 35 percent.
The widened gap would encourage good companies to come to the stock market, and the government would end up collecting more tax ultimately. Because, listed companies find it hard to dodge taxes.
If the tax on income from bonds is waived that would be supportive to the initiatives to develop an effective bond market in Bangladesh, suggested the BMBA.
The request to bring back the 0.015 percent tax on shares' transaction value from existing 0.05 percent has also been repeated by the association.
Merchant banks, which are taxed at a rate of 37.5 percent, are in extreme pressure in business and the association requested the government to reduce it to 32.5 percent.
Due to lack of business opportunity and a huge sunk cost over years, the merchant banks in Bangladesh are in a tight corner.