Finance minister AMA Muhith on Wednesday said that revising of the corporate tax rate might be possible for after the next general election.
He came up with the remark while addressing a panel discussion organised by Bangladesh Association of Publicly Listed Companies on ‘Raising awareness on various aspects of the Capital Market’ at Bangabandhu International Conference Centre in the city.
The finance minister’s comment came as a number of business people at the seminar mentioned the country’s high rate of corporate tax that discouraged foreign equity investments.
Muhith said, ‘It is true our corporate tax rate is high for the development of the capital market. It would be tight to change the structure of corporate tax and there will be risk in revising corporate tax for the hand to mouth economic situation.’
‘I think time has come to take some risk, and it should be possible for us to revise the corporate tax after next national election,’ he said.
Speaking about the role of capital market in supporting economy, Muhith said it has not been possible to build a proper capital market to support the economy.
Although the capital market regulatory body has taken many initiatives, the capital market is not providing the boost for the economy, he said.
Speaking about the corporate tax issue, BAPLC president Muhammed Aziz Khan said that Bangladesh’s corporate and individual savings were less than those in other countries due to high taxation.
Financial institutions have to pay up to 42 per cent corporate tax, resulting in less to lesser earnings of a company, withholding tax of up to 20 per cent, he said.
Besides, formation of subsidiary company is a requirement under the corporate governance guidelines where subsidiaries have to pay tax on dividend and on their income every time, he said.
Speaking at the second session of the seminar, DSE Brokers Association of Bangladesh president Ahmed Rashid Lali said, ‘We have calculated that government receives 76 per cent tax on our income. First from DSE, secondly from our brokerage house and thirdly from our personal file’.
Mentioning the absence of reward and punishment in the capital market, PricewaterhouseCoopers Bangladesh Private Limited managing partner Mamun Rashid said there has been very small scale punishment in the capital market for illegal manipulation.
Hinting at the recent takeover of Social Islami Bank Limited and Islami Bank Bangladesh Limited, Mamun said, ‘We have witnessed hostile takeover of banks but the regulator did nothing in this regard.’
Takeover may happen, as it happens in other countries, but it the recent takeover in banking sector allegedly happened in presence of members of law enforcing agencies, he said. ‘It’s not takeover of a bank, it’s hijacking,’ Mamun said.
Presenting a keynote paper at the seminar, IDLC Investments managing director Arif Khan said that 73 per cent of manipulations were done by the company insiders.
Auditors, shareholding directors, independent directors and officials were involved in such irregularities, said
Arif, also a former commissioner of Bangladesh Securities and Exchange Commission.
Bangladesh Securities and Exchange Commission chairman M Khairul Hossain, BAPLC executive committee member Farzana Chowdhury, former National Board of Revenue chairman Muhammad Abdul Mazid, Dhaka Stock Exchange managing director AKM Majedur Rahman and Chittagong Stock Exchange managing director Md Shaifur Rahman Mazumdar, among others, addressed the seminar.
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