Loading...

Fund managers seek tax exemptions for AIFs

FE Report | Published: June 21, 2019 11:01:04 | Updated: June 23, 2019 11:35:14


Shameem Ahsan, chairman of the Venture Capital & Private Equity Association of Bangladesh, speaking at a post-budget press briefing at Janata Tower in the city on Thursday. Shawkat Hossain, secretary general of VCPEAB, was also present

Alternative investment fund managers (AIFMs) have urged the government to provide policy supports, including exemption from corporate tax, for the funds to help drive the country's startup ecosystem and generate employments.

They also sought tax exemption for investments made by high-net-worth individuals in the alternative investment funds.

At a post-budget press briefing, the fund managers also demanded that the government offer tax rebate on investments made by the provident funds.

The Venture Capital & Private Equity Association of Bangladesh (VCPEAB) organised the press conference at Janata Tower in the city's Karwan Bazar area on Thursday.

Alternative investment funds (AIFs) directly trigger employment generation, create self-employment opportunities, and are often the only available source of financing for small and young companies.

The Bangladesh Securities and Exchange Commission (BSEC) formulated the much-needed Alternative Investment Rules in 2015, paving the way for mobilising funds for startups through AIFMs.

Speaking at the event, Shameem Ahsan, chairman of the VCPEAB, said the startups play an important role across the world in creating employments through developing innovative ideas.

"The AIFMs can come up with necessary support to meet the government's target of employment generation. To this end, we need policy support to ensure the flow of funds for the startups," he said.

The association has sought exemption from corporate tax for this sector for the next 10 years as the sector is now in its fledgling stage.

Mr Ahsan said the 2.0 per cent stamp duty on alternative investment funds is also a burden for the fund managers.

"Local investments should be encouraged alongside steps to attract foreign investments. We need policy support in the early stage of alternative investment funds industry," said Mr Ahsan, also a general partner of the Pegasus Tech Ventures.

Zia U Ahmed, vice chairman of the VCPEAB, said there is no stamp duty on investment funds in other countries.

"Mutual funds have been exempted from the stamp duty. Alternative investment funds should also be exempted from stamp duty," he added.

He also said investments made by high-net-worth individuals in the alternative investment funds should be exempted from tax to promote the sector for the sake of generating employments.

"We need an investment-friendly regulatory framework," Mr. Zia added.

Shawkat Hossain, secretary general of VCPEAB, said imposing tax on the small earnings of alternative investment funds would be 'disastrous' for the industry.

"The venture capital companies in Bangladesh can collectively raise and invest thousands of crores of taka in the startups, if necessary supports are ensured by the government," said Mr Shawkat, also the managing director BD Venture.

Wali-ul Maroof Matin, director of VCPEAB, said presently the country has been witnessing an influx of foreign funds because of the fast economic growth.

"There is no scarcity of local funds either. We need policy support to ensure proper utilisation of local funds through venture financing," said Mr Maroof, also the managing director Maslin Capital.

Presently, the number of alternative investment funds in the country is 16.

mufazzal.fe@gmail.com

Share if you like