The National Board of Revenue has asked all brokerage houses under Dhaka Stock Exchange and Chittagong Stock Exchange for updating the data of individual shareholders having 12-digit e-TINs (taxpayer identification numbers), officials said. The revenue board made the directive in the context of complications being faced by the listed companies in deducting tax at source on dividend earnings of individual shareholders, they said.
Listed companies are deducting tax at 15 per cent on dividend income of individual investors having 12-digit TINs, popularly known as e-TINs, though the applicable tax rate is 10 per cent for them, they said.
In two separate letters issued on Wednesday, the revenue board asked the DSE and CSE for taking necessary steps so that their clients to update their data immediately.
Officials said that they made the directives for ensuring smooth collection of tax at source from the individual investors on their dividend earnings.
An updated data will also end the problems being faced by the listed companies in deducting advance income tax (AIT), they said.
According to the Income Tax Ordinance-1984, individual investors who don’t have 12-digit taxpayers identification numbers will have to pay 15 per cent advance tax on their income derived as cash dividends which they get from the listed companies.
On the other hand, the tax rate on cash dividends for individual investors having 12-digit TINs is 10 per cent.
The provision came into effect from July 1 from the current fiscal year of 2014-15.
The listed companies will deduct the tax while transferring the cash dividends on the account of investors or beneficiary owners account holders.
Many BO account holders have been making allegation that dividend providing companies have deducted tax at the rate of 15 per cent from
their income though they have e-TINs, an NBR official said.
They said that dividend providing companies were deducting AIT at flat rate of 15 per cent as they have no updated data containing e-TINs.
Representatives of those companies also informed the NBR that they were compelled to do so in the absence of updated data of investors, officials said.
-With New Age input
