The Bangladesh Securities and Exchange Commission (BSEC) has called upon the National Board of Revenue (NBR) to keep an opportunity for investing undisclosed money in the capital market unconditionally with a 10% additional tax.
This is part of the capital market regulator's five-point proposal to the revenue authorities for their inclusion in the upcoming budget for fiscal 2022-2023.
The government currently allows the investment of untaxed money in the stock market subject to paying 25% tax, and a 5% penalty on the payable tax.
And such investment is now under the condition of keeping it in the capital market for at least one year.
In February, the Dhaka Stock Exchange (DSE), to facilitate investments of undisclosed money in the stock market, proposed the tax rate to be fixed at a flat 5%.
It also wants the continuation of the existing system where no questions are asked about the sources of income.
Meanwhile, representatives of the Chittagong Stock Exchange (CSE) have proposed a flat tax rate of 10% for the investment of black money in stocks.
BSEC's other proposals
To attract good and big companies to the capital market, the commission has proposed to keep a gap of 10% in the tax rate of listed and non-listed companies.
In the current financial year, the tax gap is 7.5% – 22.5% for listed companies and 30% for others.
The BSEC also proposed raising the tax-free dividend income limit, repealing dual taxes and offering coupon-bearing bonds the same facilities as zero-coupon bonds.
At present, the dividend income of capital market investors is tax-free up to Tk50,000. The commission has called upon the revenue board to increase the limit to Tk1 lakh.
According to the income tax ordinance, any income /Interest derived from the zero-coupon bond is exempted.
The commission has also proposed to maintain this facility in the case of coupon-bearing bonds to rejuvenate the bond market and make it vibrant.