DSE for flat 5% tax on investment of black money in stocks

Dhaka Stock Exchange (DSE), in order to facilitate investments of undisclosed money in the stock market, wants the tax rate to be fixed at a flat 5%.

It also wants the continuation of the existing system where no questions are asked about the sources of income.

Meanwhile, representatives of the Chittagong Stock Exchange (CSE) have proposed a flat tax rate of 10% for the investment of black money in stocks.

The government currently allows the investment of untaxed money in the stock market subject to paying 25% tax plus a 5% penalty on the payable tax.

The two bourses made the calls during a pre-budget discussion at the National Board of Revenue (NBR) Building in Dhaka's Segunbagicha on Tuesday.

Speaking at the event, DSE Chief Operating Officer M Saifur Rahman Mazumdar, said that the proposed tax rate will channelise undisclosed money to the real economy of the country and it will assist in the development of the capital market.

However, expressing dissatisfaction, Masud Sadiq, a member of the NBR, said that the "beneficiaries" of such advantages hardly stand in support of the NBR when criticism strikes.

He said, "When we are criticised for allowing investments of undisclosed money without any question, those who are benefited are not to be found. 

"No speeches are made, no statements are issued to for us."

In order to increase the corporate tax rate gap between listed and non-listed companies in the capital market, DSE also proposed 17.5% tax rate for listed companies and 0.015% for TREC holders.

The bourse also sought an increase of the ceiling for tax-free dividend income to Tk100,000 from the existing Tk50,000.

Chittagong Stock Exchange Managing Director (Acting) Md Ghulam Faruque, Bangladesh Merchant Bankers Association President Md Sayadur Rahman, Bangladesh Insurance Association Executive Member Imam Shaheen also spoke at the programme.

The discussion session was also attended by senior officials of the NBR.