Brokers association requests 5% tax if black money invested in stocks

Sunbd Desk || Published: 2020-06-19 04:04:36 || Updated: 2020-06-19 06:36:14

The additional tax should be reduced to 5 percent instead of the proposed rate of 10 percent in order to make the facility to invest undisclosed money in the stock market effective, said the DSE Brokers Association (DBA).

It also called for the withdrawal of the previously prescribed 3-year lock-in as the context has been changed after the government decided to allow a wide range of undisclosed assets, including cash, to be whitened.

Of the asset classes, only the capital market is subject to lock-in that requires the mandatory holding of investments throughout the dictated time.

In a press statement on Thursday, the association of the members of the country’s premier bourse said that the capital market would attract investments from the chunk of undisclosed wealth if the two proposals are entertained.

The association, like many other stakeholders of the capital market, has also reiterated its request to bring the brokerage tax down to 0.015 percent which was increased to 0.05 percent a few years back.

The advance income tax on securities trading is hurting the brokerage industry because it is not adjustable if the firms make losses at year end.

DBA President Sharif Anwar Hossain, in the statement, said the market turnover got drastically low in the bearish condition of the stock market. Brokerage firms depending on commission income are making continuous losses and fearing a collapse in business activities that is likely to lead to the closure of branches.

The crisis is at peak now because of the shutdown and the ongoing anaemic brokerage income.

They have urged the finance ministry to reconsider the advance tax rate, and are expecting a positive outcome in the final budget.

The community requested the government to raise the tax-free limit of annual dividend income for local individuals to Tk2 lakh from the existing Tk50,000.

The DBA also demanded that the government reduce corporate tax for listed companies by 2.5 percent point what is done for non-listed companies only.

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