The Dhaka and Chittagong stock exchanges will get tax exemption facility for the next five years as they have become profit-oriented entities after demutualisation.
Finance minister AMA Muhith made the announcement while placing before parliament the proposed budget for the fiscal year 2015-2014 on Thursday.Muhith said, ‘I propose to offer tax exemption facilities for five years in graduated rate for demutualised stock exchange with a view to maintaining stability in the capital market together with its continual expansion and strengthening.’
The Dhaka Stock Exchange and the Chittagong Stock Exchange on November last year became demutualised stock exchanges after the enactment of Demutualisation Act 2013 by the government to bring more transparency in the stock exchanges’ functioning.
After the demutualisation the DSE and the CSE turned into profit- oriented entities from non-profit ones.
The finance minister also proposed to increase the tax free dividend limit from Tk 10,000 to Tk 15,000.
Besides the facility, the government imposed 15 per cent gain tax on transfer of shares of the shareholders of the demutualised exchanges.
Earlier the bourses had requested the government to waive the shareholders of the demutualised stock exchanges from gain tax on transfer of their shares.
The member-brokers of the DSE who turned into shareholders of the bourse got 72.10 lakh shares each at a face value of Tk 10 each share.
Each member-broker also got a trading tight entitlement certificate for conducting business as a stockbroker. The member-broker will be able to transfer the TRAC for once within five years of issuance. After five years the TRAC will be non-transferable.
As per the amended Income tax bill as per the FY 2014-15, the TRAC-holding company have to pay 10 per cent tax on its realised gain.
Besides, a sponsor-director of a TRAC-holding company has to pay 3 per cent tax on profit if he realises gain more than Tk 10 lakh a year.
If sponsor-directors’ gain exceeds Tk 20 lakh, the tax rate will be 5 per cent.
Muhith said that as a result of the initiatives taken from time to time the price index and market capitalisation of the DSE had been quite stable since the beginning of 2013.
-With New Age input
