2024-06-07 04:23:09
The proposed price range for the subsequent monetary yr 2024-2025 has no excellent news for capital market buyers. Recession capital market didn’t get any incentives on this yr’s price range, however capital good points (capital good points) have been taxed. Moreover, the switch of securities or shares of any firm or fund listed within the capital market needs to be taxed on the fee of 10 p.c. Moreover, within the proposed price range, though the tax fee of listed corporations within the capital market stays unchanged, it has been proposed to scale back the world of unlisted corporations by 2.50 p.c.
Dhaka Inventory Trade (DSE), Chittagong Inventory Trade (CSE), Bangladesh Service provider Bankers Affiliation (BMBA), DSE Brokers Affiliation of Bangladesh (DBA) with the purpose of stimulating the capital market within the proposed price range of the subsequent fiscal yr have made a number of calls for together with tax exemption, coverage assist from the Nationwide Income. to the Board (NBR). Nonetheless, no reflection was seen within the proposed price range this yr.
All events associated to the capital market demanded that no new tax must be imposed on particular person buyers. However, that demand was not fulfilled in the long run. Fairly, the federal government has to pay tax on the fee of 15 p.c on the revenue of greater than 50 lakh rupees in a specific fiscal yr.
For the previous two weeks, there have been rumors within the capital market that the federal government goes to tax capital good points within the subsequent price range. In consequence, a steady fall within the capital market has been noticed. Which is now true.
The problem got here into dialogue after the information that capital good points tax was being imposed within the subsequent price range was printed in numerous media. DSE and CSE authorities held a press convention, demanding to not impose this tax. Nonetheless, the finance minister didn’t hearken to the calls for of the share market-related events.
The Finance Minister has proposed within the price range that particular person buyers won’t be taxed on capital good points as much as Tk 50 lakh. Nonetheless, if the revenue is greater than 50 lakh rupees, it must be taxed. For instance, as an instance an investor made a revenue of 55 lakh rupees in a single yr by buying and selling shares within the secondary market. In that case, the revenue can be below the tax-free profit as much as Tk 50 lakh. The remaining revenue of Tk 5 lakh can be added to the entire revenue of that investor. That investor has to pay tax on the fee relevant on his whole revenue in a specific monetary yr. Nonetheless, if an investor makes a revenue of greater than 50 lakh rupees by holding a share constantly for five years, then the revenue can be taxed on the fee of 15 p.c.
The price range additionally proposes that any revenue made by a company entity apart from particular person buyers by investing within the capital market can be taxed.
In the meantime, the Finance Minister has not made any change within the company tax fee within the proposed price range for the subsequent monetary yr. If a listed firm points greater than 10 p.c of its paid-up capital within the inventory market, the company tax has been stored unchanged at 20 p.c, topic to circumstances. If the circumstances should not met, the tax fee can be 22.50 p.c in case of listed corporations. And corporations that may launch lower than 10 p.c of the paid-up capital within the inventory market, the company tax fee can be 22.50 p.c topic to compliance. In case of such corporations who don’t adjust to the circumstances, the tax fee can be 25 p.c.
Within the case of listed corporations, the situation given to get the advantage of two and a half p.c decrease company tax is that single transaction of greater than 5 lakh rupees and annual transaction of greater than 36 lakh rupees should be carried out by banks. If this situation is just not met, the businesses won’t get the advantage of decrease company tax.
Folks associated to the capital market say that 90 p.c of the buyers within the capital market are institutional buyers. Amongst them are entrepreneurial administrators of varied corporations, placement shareholders, inventory brokers and sellers. All institutional buyers are taxed on capital good points at a minimal fee of 5 to a most of 10 p.c. Capital good points tax is just not paid on unusual particular person buyers, that are solely 10 p.c of the entire capital market buyers. Moreover, the brand new price range additionally proposed to extend the company tax fee hole between listed and unlisted corporations to encourage itemizing of excellent corporations within the inventory market. Together with this, the DSE authorities demanded to scale back the tax fee of listed corporations to 17 and a half p.c. And within the case of unlisted corporations, it’s demanded to extend it to 37 and a half to 40 p.c. However, the finance minister didn’t take this demand into consideration. Fairly, the hole between listed and unlisted tax charges has been narrowed.
When requested about this, the previous chairman of Dhaka College’s economics division, Professor Abu Ahmed, instructed RisingBD that taxing capital good points from the capital market within the proposed price range was not justified in any respect. Within the present market situation, buyers are struggling to calculate capital good points and losses. Moreover, the hole between listed and non-listed tax charges has been narrowed. This may additional discourage any new firm from itemizing. On account of this coverage of the federal government, the capital market will lag behind and shrink in comparison with the general economic system. I’m very disillusioned with the proposed price range.
DBA President Saiful Islam instructed mass media that the federal government’s resolution concerning the capital market within the proposed price range is a dangerous habits. We sought coverage assist from the federal government to stabilize the capital market. Authorities imposed reverse tax burden. Specifically, it’s requested to not tax capital good points. Moreover, it’s proposed to extend the company tax fee hole and scale back advance revenue tax on securities transactions to encourage itemizing on the inventory market. However, it was not mirrored within the price range.