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The Financial Express
Swasti Lankabangla Swasti Lankabangla

CSE for reduction of corporate tax for listed cos

| Updated: June 21, 2020 13:11:07


CSE for reduction of corporate tax for listed cos

Chittagong Stock Exchange (CSE) has made a set of proposals, including reduction of corporate tax for listed companies, for the government's further consideration before finalising the budget for the fiscal year (FY) 2020-21.

The CSE chairman Asif Ibrahim made the proposals on Wednesday at a post-budget press briefing held virtually.

Prof. Md. Mizanur Rahman, a commissioner of the securities regulator, also joined the virtual press briefing.

In the budget, the government has proposed to reduce the corporate tax of non-listed companies by 2.50 per cent amid unchanged corporate tax rate for listed companies.

"We have proposed to reduce corporate tax for listed companies to 20 per cent from existing 25 per cent to encourage quality companies to be listed," said the CSE chairman Mr. Ibrahim.

He said the companies in future will be more discouraged about their listing with the stock exchanges following the proposed reduction of tax gap for listed and non-listed companies.

The CSE chairman said the government's revenue will be increased through transparent reporting if the corporate tax is reduced for listed companies along with non-listed ones.

He said a huge amount of capital is required to achieve the target of GDP growth in the coming days and a strong capital market is the best platform to raise funds.

"The private investments made through bank loans not only weakens the banking channel but also hinders the development of the capital market," the CSE chairman Ibrahim said.

He said quality strategies should be implemented for further development of the country's capital market.

"The government should encourage individual tax payers to invest in the capital market at a large scale."

The CSE chairman said the government's measures proposed for bond market will enhance the transactions in the bond market.

"New scopes will be created for large project financing if the bond market is flourished."

He also made a proposal of waiving the corporate tax for newly-listed companies for first three years of listing.

"The flow of quality shares will be increased in the capital market following the waiver of tax for newly-listed companies," said the CSE chairman Mr. Ibrahim.

The CSE has also sought the waiver of its tax for next five years. The stock exchanges are paying tax availing a benefit which will be withdrawn in 2020.

"It will be convenient for the CSE to find out strategic partners if tax waiver is offered for next five years," said the CSE chairman.

As per the demutualisation act, stock exchanges will have to sell 25 per cent shares to strategic partners.

Dhaka Stock Exchange (DSE) has already sold 25 per cent stakes to a Chinese strategic partner, while the CSE is yet to finalise deal with any strategic partner.

The CSE has also proposed to reduce tax at source to 0.015 per cent from existing 0.05 per cent imposed on commission realised from transactions of listed securities.

"Most of the brokerage firms presently are incurring losses. As a result tax at source imposed on brokerage commission should be reduced to 0.015 per cent considering the ongoing situation," said the CSE chairman.

The president of Bangladesh Merchant Bankers Association Mr. Sayadur Rahman and the managing director of Vanguard Asset Management Waqar Chowdhury also joined the virtual press briefing.

Managing Director of the bourse Mamum-Ur-Rashid moderated.

mufazzamal.fe@gmail.com

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