Corporate tax gap between listed, non-listed firms widened to 7.5%

In a bid to encourage companies to get listed on the struggling stock market, the government has widened the existing 5% corporate tax gap between listed and non-listed firms to 7.5%.

Earlier, listed companies enjoyed a corporate tax rate of 20%, but due to strict conditions, many companies failed to qualify for this rate and ended up paying 22.5%. 

Similarly, although the corporate tax rate for non-listed companies is 25%, they often end up paying 27.5% due to failure to meet requirements.

In the latest budget, announced by Finance Adviser Dr Salehuddin Ahmed today (2 June), the corporate tax for non-listed companies has been set at 27.5%. 

At the same time, conditions for listed companies to enjoy the 20% rate has been relaxed, resulting in a tax gap of 7.5% between the two groups.

Rupali Chowdhury, managing director of Berger Paints Bangladesh Limited, a publicly listed company, told TBS that the initiative to widen the tax gap between listed and non-listed firms is a good one, as it would encourage more companies to become publicly listed.

However, she also believes that other compliance requirements should be relaxed. Moreover, the IPO process should be made easier and faster.

"Currently, raising funds through IPOs takes 1.5 to 2 years. In contrast, securing a bank loan takes significantly less time," she said.