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A telecom operator will enjoy a 10 per cent tax rebate if it floats 20 per cent shares to get listed on the bourses.
Banglalink is the only operator that has been in discussion for public listing for a long time. So, the tax incentive may be intended to pave the way for the listing of Banglalink.
In 2023, Banglalink decided to float 10 per cent of its outstanding shares but the plan was halted as, the company said, it was waiting for a favourable market condition.
Market operators also said there may be scope of RPO (repeat public offering) for already listed mobile operators - Grameenphone and Robi Axiata -- to enjoy the rebate on income tax for FY26 and FY27.
In that case, Grameenphone and Robi may feel inspired to issue more shares to the public.
Both the organisations are well-governed, have significant market value on the bourses and have offloaded 10 per cent of their outstanding shares to the secondary market.
The availability of more shares of the blue chip scrips may energize the appalling equity market.
At present, the stock market lacks quality shares. The low number of investable stocks is a major reason for the lackluster market performance.
Currently, non-listed telecom operators pay 45 per cent corporate tax while listed peers pay 40 per cent tax.
Among four telecom operators in the country, Grameenphone and Robi Axiata listed on the stock exchanges in 2009 and 2020 respectively.
"The tax incentive measure will give a big boost to investor sentiment and encourage mobile operators to offload more shares to avail of the tax benefit," said Akramul Alam, head of research at Royal Capital.
GP secured a 10 per cent year-on-year growth in profit to Tk 36.4 billion in 2024, the highest profit in three years. Robi also posted a record profit of Tk 7.03 billion for 2024.
The telecom operators pay a larger chunk of their revenue to the government exchequer in taxes and other fees.
Mr Alam believes if telecom operators float more shares, the supply of good shares will increase, which will help restore confidence of investors in the struggling market.
Moreover, the tax incentive would give listed telecom operators a competitive edge and help them make additional profit and declare higher dividends for investors, he added.
Meanwhile, turnover tax on mobile operators has also been reduced from 2 per cent to 1.5 per cent in the proposed national budget.
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