NBR yet to issue SRO on reduced gains tax on investing Tk947cr in capital market upsetting brokers, investors
As per the Share Purchase Agreement (SPA), the Chinese Consortium has transacted the money to DSE in last month after the Bangladesh Bank gave a go-ahead. With the money disbursed the Chinese Consortium became the strategic partner of the DSE from September 4
Investors and Dhaka Stock Exchange (DSE) brokers are getting increasingly frustrated as the National Board of Revenue (NBR) is yet to issue an official order offering 10% gains tax on Tk947 crore received from the Chinese strategic investors.
The delay from the revenue board disappointed the stakeholders, although Finance Minister AMA Muhith last week gave the go-ahead and asked the NBR to act, sources at the Ministry of Finance said.
Muhith in his approval said the amount received from the Chinese strategic investors against the sale of 25% DSE stake will be subject to only 10% gains tax if the amount is invested in the capital market for a minimum period of three years.
“We are waiting for the Statutory Regulatory Order (SRO) from the NBR giving the concessionary rate of 10% gains tax, ” DSE Director Minhaz Mannan Emon told Dhaka Tribune on Tuesday.
He said the market will get momentum with the injection of Tk947 crore.
Stakeholders think the policy decision would increase the cash inflow into the market as well as help the government to earn more tax from the bourse.
Speaking to the Dhaka Tribune, a good number of shareholders of DSE said if the government reduces the capital gain tax to 10%, they will make the full investment of the amount received from the sale of shares to Chinese investors in the capital market.
“This will make the market even better. The liquidity crisis will be overcome,” said a DSE member.
“Apparently, it may seem that the government would lose revenue by waiving capital gain tax. But in long term, the government will earn more from the stock market, if Tk947 crore is invested in the capital market as it will increase transaction volume,” DSE Brokers Association (DBA) president Mostaque Ahmed Sadeque told the Dhaka Tribune.
He said the NBR should immediately issue the SRO.
Talked, officials concerned at the revenue board declined to make any comment on the proposed SRO.
The divestment of 25% share of DSE was mandatory for the DSE management as the Demutualisation Scheme 2013 stipulates. The Tk947 crore was already distributed among 237 DSE shareholders.
As per the Share Purchase Agreement (SPA), the Chinese Consortium has transacted the money to DSE in last month after the Bangladesh Bank gave a go-ahead. With the money disbursed the Chinese Consortium became the strategic partner of the DSE from September 4.
Since the Chinese consortium has vast experience in operating one of the largest stock exchanges in the world, local stakeholders are expecting a good operation module, better governance and technological improvement in the prime bourse of the country.
In becoming strategic partner, the Chinese Consortium offered to develop SME market, product diversification and technology upgrade. It also offered technical support of Tk307 crore.
Source: https://www.dhakatribune.com
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