Parliament is going to pass today the Finance Bill-2014 scrapping the proposed tax on realised gains from stock investment for individual investors and increasing tax exemption limit on dividend income, finance ministry officials said.
They said that the government at the last moment decided to withdraw the tax on individual investors’ realised gains that was proposed in the finance bill considering the possible negative impact on the already daunting capital market.
Finance minister AMA Muhith in the finance bill placed in the parliament on June 5 proposed to impose tax on capital gains for the first time in the country.
The proposed tax rate was 3 per cent on capital gains above Tk 10 lakh but less than 20 lakh, 5 per cent for above Tk 20 lakh while the tax-free limit of capital gains was proposed at Tk 10 lakh.
Muhith on Thursday instructed the officials of the National Board of Revenue officials to make an upward revision of tax-free limit of capital gains to Tk 20 lakh and reduce the proposed tax rate to 2 per cent for capital gains above Tk 20 lakh but less than Tk 50 lakh and 3 per cent for above income.
Initially, he was in favour of continuation of the proposal of the finance bill on the gain tax.
The revenue board expected to collect nearly Tk 200 crore from tax on capital gains.
But finally, the government high-ups have decided to withdraw the proposed tax following the demand from the capital market stakeholders including investors, experts, the Bangladesh Securities and Exchange Commission, the Dhaka Stock Exchange and the Chittagong Stock Exchange, the ministry officials said.
The decision was made to avoid any further negative impact on the country’s two bourses as the DSE and the CSE has already reacted sharply and markets index dropped significantly in last few days after imposition of gain tax, they said.
Muhith will place the amendments in the parliament for approval of the house, they said.
Among other amendments, the government may relax the proposal regarding offering 10 per cent tax rebate for the companies listed in the share market for giving 30 per cent dividend.
In the original proposal, the government scrapped the provision of tax rebate.
The government may also increase the tax exemption limit on dividend income for stock investors to Tk 20,000 from the proposed Tk 15,000 which is now Tk 10,000.
There are approximately 29.79 lakh beneficiary owner’s accounts in the country.
Advance income tax at the rate of 5 per cent on mobile set import may also be withdrawn.
-With New Age input
