Listed companies want restoration of 10-year tax holiday for pvt economic zones

The Bangladesh Association of Publicly Listed Companies (BAPLC) has urged the National Board of Revenue (NBR) to reinstate the 10-year tax holiday for private economic zones or hi-tech parks. 

The withdrawal of previously announced incentive could hurt investors' confidence, the association said in a letter to the NBR on Wednesday (12 June).

The association further urged the NBR to reconsider the budget proposal to tax individual investors on capital gains exceeding Tk50 lakh from listed securities at regular income tax rates. 

It said such a measure could potentially result in a tax burden exceeding 40% for high-net-worth individual investors, while institutional investors would face significantly lower tax liabilities.

The move might discourage investments in the falling stock market, said the association. 

Additionally, the association demanded that clear guidelines to be established regarding the treatment of realised capital losses to ensure certainty and confidence among individual investors.

It said the proposed 7% flat tax to be deducted at source (TDS) for all contractor payments, regardless of income level, should be reconsidered. 

The existing system, which varies from 3% to 7% based on specific revenue slabs, is perceived as fairer to contractors, particularly those with lower income levels.

It also called for "harmonizing the tax treatment for provident fund income across both government and private sectors to ensure equity, fairness, and public trust in the taxation system."

The BAPLC mentioned that income of provident funds for government employees is entirely tax-free whereas income of private sector provident funds is subject to a 15% tax.

Besides, it said the introduction of retrospective taxation for the income year 2023-2024 creates significant challenges for taxpayers, particularly salaried individuals, by creating uncertainty and financial strain.

"Many taxpayers find it difficult to plan their investments effectively with the sudden imposition of retrospective tax, leading to a large amount of tax being deducted from their salaries in June," said BAPLC.

To promote fairness and predictability, it is crucial to reconsider the retrospective taxation policy for the income year 2023-2024, it added.

However, they appreciated the launching of a prospective tax system that will enable taxpayers to know the rates of tax on their income in advance, instead of waiting until the end of the income year.