Individual investors will not be taxed on capital gains from any listed security, clarified the National Board of Revenue (NBR).
Individual investors' capital gains from any listed securities were left tax-free through a previous statutory regulatory order (SRO) by the NBR, and it remains the same, said Bapan Chandra Das, NBR second secretary for tax policy.
Previously, capital gains from transfer of state-owned enterprise (SOE) shares and government securities that include treasury bonds, bills and other government debt securities were not taxable. They became taxable after the Income Tax Paripatra 2022-23 was published on Wednesday.
The Finance Act this year made capital gains from government securities taxable, while the Income Tax Paripatra included SOE shares too.
Only institutional investors' capital gains from listed SOE shares and government securities will be taxed, similar to what they have been paying against their capital gains from non-government companies, the NBR official told The Business Standard.
According to the Income Tax Paripatra, capital gains from all government securities and listed public companies will be taxed, creating panic among capital market investors fearing a stock selloff.
However, since the 2015 SRO that exempted individual investors from paying any tax on their capital gains from the sale of listed securities is still effective, and the capital gains of individuals from all listed securities will remain tax waived, Bapan Chandra Das explained.
Only institutional investors shall pay capital gains taxes on all securities from now on.
In Bangladesh, the capital gains tax is 10%.
Sponsor-directors and owners of over 10% shares are allowed to pay 5% tax on capital gains from the transfer of their shares, according to the 2015 SRO.