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The government has sharply cut the stamp duty on registration of trust deed of the Bangladesh Security and Exchange Commission (BSEC) approved alternative investment funds to only 0.1 per cent from earlier 2.0 per cent to encourage such investment in the country.
The Internal Resource Division (IRD) under the Ministry of Finance has issued a statutory regulatory order (SRO) in this regard, signed by IRD senior secretary and National Board of Revenue chairman Abu Hena Md Rahamatul Muneem.
The IRD has also set the maximum stamp duty amount at Tk 1.0 million and the minimum duty at Tk 5,000 on the total value of the deed.
However, only the BSEC approved fund would be entitled to the reduced rate of the duty.
According to the BSEC, alternative investment fund means any fund established or constituted in Bangladesh in the form of a trust which is a private equity fund, or a venture capital fund or an impact fund or any other type of fund as declared by the commission.
Alternative investment fund is necessary for the country to finance technology-based start-ups.
The high rate of stamp duty has been discouraging the investors as it increases the cost of issuance of the funds. Fund managers were not willing to get their funds registered with the BSEC for this high rate of stamp duty.
Following their demand, the stamp duty has been reduced sharply through issuing the latest SRO.
On November 2019 last, the IRD reduced the duty only for the venture capital trust.