Asset management companies in the country have sought tax privilege at reduced rate for 10 years from the National Board of Revenue, officials of the NBR said.
In a recent application, Association of Asset Management Companies, led by state-owned Investment Corporation of Bangladesh, demanded the NBR for fixing income tax at the rate of 10 per cent on their income for the next 10 years, they said.
In the application, the association argued that if they were provided the benefit, it would help the capital markets to be stabilised, capital inflow will be increased and more new investors would come forward to invest in the capital market.
‘The NBR has already scrutinised the appeal and decided to discuss the issue at its next board meeting for a decision,’ a senior NBR official told New Age on Thursday.
He said that AAMC demanded that they had created opportunities for the banks, non-banking financial institutions, insurance companies, small investors and non-resident Bangladeshi’s in investing Tk 3,000 crore in the country’s capital markets from 2010 to 2012 that contributed to liquidity supply during the recent crash in the markets.
They also demanded that they had arranged different trainings, seminars and other programmes for creating awareness among the investors over the years, he added.
Analysing their application, the revenue board has instructed the officials concerned to collect documents from the AAMC in favor of their demand for creating opportunities in investing Tk 3,000 and other documents and statistics of awareness programmes, officials said.
The NBR also instructed them to examine if AMCs get such tax benefits in neighboring countries such as India and Pakistan and collect related information from the Securities and Exchange Commission, they said.
Currently, there are 19 asset management companies that operate and manage mutual funds in the country’s stock markets.
According to the association, AMCs provides profit to the investors, particularly retail investors, through operating mutual funds.
AMCs get 0.5 per cent to 1 per cent one-off fees for managing mutual funds and 0.9 per cent to 1.2 per cent fees for recurring management of mutual funds while the companies pay income tax at the rate of 37.5 per cent.
According to the association, the mutual fund industry in the country is still at its infant level and requires nurturing for growth.
In developed countries like USA and European Union, mutual funds provide 80 per cent of total capital of the markets, even in India and Pakistan the rates are 25 per cent and 14 per cent respectively while the rate is only 2 per cent in Bangladesh, according to data of AAMC.
-With New Age input
