The DBA has proposed reinstating a full tax exemption for individual investors and reviewing the tax framework for foreign individual and institutional investors.
The DSE Brokers Association of Bangladesh (DBA), an organisation representing stockbrokers in the capital market, has proposed a full exemption from capital gains tax on listed securities for individual and foreign investors until 2030.
The proposal aims to restore investor confidence, increase market liquidity and encourage long-term investment in the country’s capital market.
On 28 October, the DBA submitted the proposal to Finance Minister Amir Khosru Mahmud Chowdhury, Special Assistant to the Prime Minister for Investment and Capital Market Affairs Tanvir Shahriar Ghani, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan, and National Board of Revenue (NBR) Chairman Ahsan Habib.
Currently, individual investors enjoy a tax exemption on capital gains from listed securities up to Tk50 lakh, while gains exceeding this threshold are subject to a 15% tax.
The DBA has proposed reinstating a full tax exemption for individual investors and reviewing the tax framework for foreign individual and institutional investors.
According to the association, the proposed measure would boost trading volumes, encourage the reinvestment of profits, promote the productive use of domestic savings and expand equity financing opportunities for listed companies.
The proposal suggests amending relevant provisions of the Income Tax Act, 2023, to exempt eligible capital gains from tax, provided the transactions are executed through stock exchanges and settled through the designated central depository system.
However, the DBA has supported retaining the existing tax regime for sponsors, directors and domestic institutional investors.
The association also noted that assessing capital gains and calculating tax liabilities would become much simpler once Central Counterparty Bangladesh Limited (CCBL) becomes fully operational.
In view of this, it has sought the exemption until 2030, the expected timeframe for CCBL to begin full-fledged operations.
DBA President Saiful Islam said an investment-friendly tax structure for individual and foreign investors would strengthen market confidence, encourage long-term investment and expand financing opportunities for listed companies.
It would also support the government’s plans for developing the capital market, he added.
The DBA has urged the relevant government authorities to give the proposal due consideration and take the necessary policy and legal measures. It also reaffirmed its commitment to working with the government, regulators and other stakeholders to develop the capital market.
Citing international and regional comparisons, the DBA said three of the seven countries considered – Sri Lanka, Thailand and China – do not tax resident individuals’ capital gains from listed shares. Vietnam levies a tax of just 0.10% on sale proceeds.
India, Pakistan and Nepal, meanwhile, tax capital gains themselves, with Nepal’s rates lower than Bangladesh’s 15% rate.
Source: The Business Standard
Read More at: csslbd.net
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