Finance minister AMA Muhith on Wednesday announced that the government slashed the capital gains tax levied on bourse shareholders to 5 per cent from 15 per cent on condition that the shareholders would invest their net share-sales proceeds in the capital market for three years’ duration.
Muhith made the declaration at the inaugural ceremony of the Bangladesh Securities and Exchange Commission’s week-long silver jubilee celebration programme at the Bangabandhu International Conference Centre in Dhaka.
The member-shareholders of Dhaka and Chittagong stock exchanges who want the incentive must have to submit an investment proposal before getting the waiver from the government, he said.
The finance minister said that the government made the decision to strengthen the country’s capital market.
Earlier, on August 6 this year, BSEC chairman requested the finance minister to consider a number of proposals including cut in capital gains tax for the interest of the country’s two stock exchanges — Dhaka Stock Exchange and Chittagong Stock Exchange — and the capital market.
The issue of tax cut proposal came to the fore since the sales of the DSE shares to a Chinese consortium of Shenzhen and Shanghai stock exchanges.
The Chinese group on September 4 bought DSE’s 25 per cent shares worth of Tk 947 crore and became its strategic investor and the bourse would also float 35 per cent of its shares through an initial public offering.
Muhith on the occasion advised businesses to raise funds from the country’s capital market instead of receiving loans from banks and non-bank financial institutions as bank-based financing was not good for any side.
He also said that the ruling party felt the post-crash wrath of investors as two unfortunate crashes (one in 1996 and another in 2010) at the Bangladesh capital market occurred during its regimes.
However, the government feels safe now as the BSEC, under the leadership of M Khairul Hossain, has found a strong footing and nothing can resist the progress of the capital market, he said.
The commission has obtained best practices and excellent rules from the international markets, which eventually has enriched its rules and regulations, he added.
Want stories like this in your inbox?
Sign up to exclusive daily email
More Stories from Tax