Multi-layer tax on dividend income to ease, says Kamal
DSE brokers group places proposals for stock market dev
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Finance Minister AHM Mustafa Kamal said on Thursday the multi-layer taxation on dividend income would be simplified to help boost investments in the capital market.
The minister's assurance came after a meeting held at the Planning Commission with the leaders of different business sectors.
The representatives of DSE Brokers Association (DBA), Dhaka Stock Exchange (DSE) and the securities regulator also attended the meeting.
"We are working on how to simply the existing multi-layer taxation on dividend income," the finance minister told the reporters.
The DBA delegation included its president Md. Shakil Rizvi, DSE chairman Professor Abul Hashem, former DSE president Rakibur Rahman, DSE director Minhaz Mannan Emon and DBA director Mohammad Ali.
Bangladesh Securities and Exchange Commission (BSEC) Chairman Professor M Khairul Hossain also attended the meeting.
At the meeting, DBA president Shakil Rizvi placed a set of proposals for further development of the country's capital market.
The proposals are: the reduction of corporate tax for listed companies, reduction of source tax on share transaction, offloading of more shares of state-owned enterprises (SoEs), restoration of trading in the bond market and the revision of banks' exposure to the capital market.
Former DSE president Rakibur Rahman also spoke at the meeting and stressed the need for share market listing of companies having good fundamentals.
The DSE representative also proposed a cut in the time of completing the IPO (initial public offering) process.
When asked, Shakil Rizvi said a company pays a certain amount of tax on its dividend income from the investment made in shares of a listed company.
"Later, that dividend income is added to the other incomes of the company. Then another amount of tax is paid on all kinds of incomes, including the dividend income," Rizvi said.
He said associate companies and individual shareholders again have to pay tax on the same dividend income.
"A company's dividend income should not be mixed up with other types of income because of the investment in the capital market," Rizvi told the FE.