The Chittagong Stock Exchange on Saturday said the proposed budget for the financial year 2013-14 offered some incentives for the retail investors
but failed to address the need of the institutional ones.
‘On the whole the budget is as usual but it could have given more concrete guidance to the capital market,’ CSE president Al Maruf Khan said at a post-budget briefing in the bourse’s Dhaka office.
He said although the finance minister Abul Maal Abdul Muhith said the provision of legalising undisclosed money through the stock market investment would continue, there was no clear statement in the budget.
‘We hope the issue of undisclosed money in stocks will be cleared in the final budget,’ he said.
Maruf demanded a period-based tax on dividend income for the institutional investors to encourage long-term investment.
‘The proposal of tax rebate for the private mutual funds is a positive move which will help to expand the mutual fund sector,’ he said.
He said the budget did not provide any special facility for the listed companies.
‘The corporate taxpayers were not given any facility rather higher tax was imposed on the listed mobile phone companies and tobacco manufacturing companies. It will reduce their dividend paying capacity which affect the market negatively,’ he said.
He also demanded a slab-based tax rebate for the listed companies on their dividend payment.
‘The withdrawal of 3 per cent tax on share premium was a positive move,’ he said.
Maruf demanded a clear announcement in the budget about tax rebate for the demutualised stock exchanges.
‘We are working sincerely for the demutualisation of the stock exchange but a clear announcement of seven-year tax waiver for demutualised stock exchanges is needed,’ he said.
He also demanded a reduction in the source tax on broker income to 0.015 per cent from the existing 0.05 per cent.
‘The government might focus on the savings bond to make up the budget deficit which would affect the bank interest rate and the capital market,’ said Maruf.
‘We hope that the budget and the next monetary policy will specifically address some issues including special allocation for the capital market, market exposure for banks, mark-to-market calculation method for helping the development of the market,’ he said.
CSE vice-president AKM Mohiuddin and director Mohammad Mofizuddin were also present, among others, in the briefing.
In the budget speech, the finance minister on Thursday proposed an increase in the limit of tax-free dividend income from the capital market up to Tk 10,000 from the existing Tk 5,000 for the financial year 2013-2014.
He proposed to scrap the existing 3 per cent tax on the initial public offering premium for the companies to be listed with the capital market.
Muhith also proposed a 15 per cent tax rebate against investment in the private mutual funds and to scrap 0.05 per cent tax on source for selling bonds.
-With New Age input
