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June 18, 2008CSE demands annulment of proposed tax on dividend
“Till now, corporate assesses are taxed @15% on their Dividend Income and the proposed imposition of tax at scheduled rates would be harmful for corporate investment in the listed securities,” the CSE President said in a press conference on Proposed National Budget for 2008-09 held in the port city today. He said presently Resident Tax Payers are subject to 10% tax on their dividend income, while NRBs are taxed at maximum rate (25%). In order to encourage individuals’ investment in the Capital Market, we propose withdrawal of tax on dividend in respect of Resident Assesses and reduction of tax to 10% for NRBs, which should also be treated as final discharge of tax liability. The CSE President congratulated the Finance Advisor Mr. Mirza Azizul Islam for placing 2nd successive budget of the caretaker government for the first time in the history of Bangladesh. “Honourable Finance Advisor also deserves our special thanks for accepting the challenge of placing the national budget for 2008-09 fiscal under the climate of worldwide ongoing economic recession caused by high fuel cost reaching just under $140 per barrel and food crisis caused by global shortfall in production, leading to serious pressure on the common mass,” the CSE chief said. Proposing to increase the limit of tax-free dividend to Tk. 100,000 for all sorts of listed securities, the CSE said presently, dividends from Mutual Funds and Unit Funds upto Tk. 25,000 are exempted. The CSE demanded allowing tax exemption on dividends from listed securities upto Tk. 300,000 for the assesses whose only source of income is share trading. Currently only Agricultural Income earners are getting such benefit upto Tk. 40,000 (Tk. 50,000 proposed for 2008-09). This will help new investors to enter the Capital Market. “Presently, individual assesses are entitled to 15% Tax Credit on their allowable investments but the Finance Advisor has proposed to cut it down to 10%, which will be seriously detrimental for investments. We strongly propose to increase allowable Investment Tax Credit limit to 20%. In unavoidable circumstances, it can be kept as it is, but slashing the allowance by 5% will never be justified,” the CSE said. On increase in maximum limit for investment, the CSE said current maximum limit of Tk. 250,000 for investment should be increased to Tk. 500,000 considering inflationary economy. On the regulation on undisclosed capital gains, the CSE said as the Finance Advisor has proposed to allow undisclosed income to be disclosed by paying a penalty of 7%, the coverage may be extended for capital gains on transfer of listed securities which are tax-free altogether, without requiring any penalty to pay whatsoever and no question should be raised on such funds in future. It may create an opportunity to bring the undisclosed capital gains, if any, to the main flow of the economy. The other CSE demands include issuing Government bonds for deficit financing, allowing flat tax holiday for the full tax holiday period, granting tax holiday to companies intending to be listed, extension of the purview of tax holiday scheme to the newly listed companies for certain period to encourage new companies to go public, enhancement of tax exemption limit for individuals to Tk. 250,000 from existing Tk. 150,000, lowering minimum tax liability for individual tax payers to Tk. 1,500 from existing Tk. 2,000, raising fund from stock market to implement large projects like 210-km-long US$900m Dhaka-Chittagong Second Highway (DCSH) and the 20-km-long $500m Dhaka Elevated Expressway (DEE). “We hope that honourable Finance Advisor would pay special attention on our above recommendations and incorporate those in the Finance Ordinance considering their merits,” the CSE President concluded. |
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CSE President Mr. Nasiruddin Ahmed Chowdhury has demanded annulment of proposed tax on dividend at corporate rates in respect of dividend income of corporate assesses to promote corporate investment in the Capital Market.
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