The government has proposed a set of proposals for the financial year 2013-2014 for the stock market ahead of the next national elections to boost the capital market and
apparently to get the public sentiment in favour of the government.
The capital market has been suffering since the market crash in 2010 due to huge liquidity crisis.
The turnover of the Dhaka Stock Exchange reached its record high on December 5, 2010 to Tk 3,249.57 crore. But just two months later the DGEN, key index of the bourse, came down from 8,723.18 points on December 1, 2010 to 7,572.61 points on January 30, 2011.
The aftershock of the crash has been continuing since then as the DGEN had lost 3,032 points in 2011 and 1,038 points in 2012.
Due to the huge fall in indices, the capital market investors in several time said that they would reply it with the next general elections. Following the investors’ sentiment finance minister Abul Maal Abdul Muhith on Thursday proposed to increase 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.
But, the Dhaka Stock Exchange and Chittagong Stock Exchange in their budget proposals had demanded increase in the ceiling of the tax-free income from dividend to Tk 50,000.
The finance minister proposed to scrape the existing 3 per cent taxes on initial public offering premium for the companies to be listed with the capital market.
‘I think the suspension of taxes on premium will encourage the new companies to enlist with the stock exchanges,’ Muhith said in the budget speech in parliament.
The finance minister proposed to offer 15 per cent tax rebate against investment in the private mutual funds.
Earlier, there was no tax rebate against investment in the mutual funds except for the investors of Investment Corporation of Bangladesh.
Muhith also proposed to scrape 0.05 per cent taxes on source for selling bonds.
The finance minister said, ‘We also have plan to give exemption to the stock exchanges from taxes after demutualisation.’
The stock exchanges in their budget proposals had sought five-year tax exemption after the demutualisation of the stock exchanges.
Muhith also proposed to keep the individual investors’ earning from share transactions out of taxes like the outgoing FY 2012-13.
The Dhaka Stock Exchange on Thursday hailed the finance minister for the proposed budget as the government gave importance to the capital market.
In a news press release, The DSE said that the budget proposals regarding the capital market would help to create an investment friendly environment and attract foreign investors in the country.
The attention given by the government to the capital market will help the stock market to increase its contribution to the country’s economy, the bourse said.
-With New Age input
