BLFCA for withdrawal of tax on zero coupon bond
Bangladesh Insurance Association on Sunday demanded that the National Board of Revenue reduces capital-gain tax on company taxpayers’ income derived from share transactions in the capital markets to 5 per cent from the existing 10 per cent.
At a pre-budget discussion with the NBR, the BIA also sought reduction of tax to 3 per cent from the existing 5 per cent on income of sponsored shareholders and directors from share transactions.
‘It will help to boost the ailing capital market if the revenue board reduces tax on capital gain,’ said Mollah Nurul Islam, secretary general of the BIA.
At the same meeting, Bangladesh Leasing and Finance Companies Association demanded withdrawal of tax on income of bank, insurance and financial institutions derived from zero coupon bonds in order to expand bond market in the country.
Currently, only individual investors get tax exemption on such income.
In its budget proposal, BIA also proposed to fix the income tax for the life insurance companies at 15 per cent and reduce the income tax for general insurance companies to 37.5 per cent including 2.5 per cent surcharge for general insurance companies from the existing 42.5 per cent.
‘As a result of income tax rate reduction, the profit of the insurance companies will increase while share and policy holders will get more dividends that will make a positive impact on the share market,’ said a written proposal from BIA submitted to the NBR.
It also called for withdrawal of the provision of imposing 5 per cent tax at sources on the commission of insurance agents and fix the ceiling of taxable income for insurance agents like individual taxpayers.
BIA also proposed to cut stamp duty on Marine Hull Insurance to keep it competitive with the other countries and said that it would attract investors to insure with local companies.
The proposal also included excluding the provision of income tax ordinance which says insurance companies will have to pay tax at the rate of 42.50 per cent on additional management cost beyond the limit set by the insurance law.
In its written proposal, BLFCA sought reduction of corporate tax rate to 37.5 per cent from the existing 42.5 per cent.
Seeking tax exemption on income of zero coupon bond, the association said that such bonds would be more popular and widely used as a source of funding if bank, insurance and financial institutions get the facility.
At the meeting, Bangladesh Pipe and Tube-well Merchants Association demanded reduction of duty on imports of those pipe and tube-well products which are not produced in the
country to 12 per cent from the existing 25 per cent.
The association also sought cash incentive for export of PVC pipe, UPVC pipe and UPVC fittings.
The Federation of Bangladesh Chambers of Commerce and Industry director Abdul Haque, BLFCA chairman Asad Khan, Union Capital managing director Akter H Sannamat, BPTMA secretary general Solaiman Parsee Faisal, among others, spoke at the meeting presided over by the NBR chairman Ghulam Hussain.
-With New Age input
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