Merchant banks seek corporate tax for listed cos reduced to 15%

The Bangladesh Merchant Bankers Association has proposed reducing corporate tax to 15% from the existing 22.5% for listed companies, which will encourage more such companies to enter the capital market.

The number of registered companies in the country stands at more than 1.5 lakh, while only 348 are listed on the stock market, the association said in a pre-budget discussion in the revenue building in the capital on Tuesday.

Besides, Md Sayadur Rahman, president of Bangladesh Merchant Bankers Association, in his written statement demanded cutting tax for merchant banks to 25% from the existing 37.5%.

He proposed considering tax deducted at source on profits as the final settlement and reducing VAT on listed companies to 10%.

At the meeting with the revenue board, the Dhaka Stock Exchange said undisclosed money holders should get a wholesale opportunity to legalise their dirty money through an investment in the stock market, subject to paying only a flat 10% tax, while Chattogram Stock Exchange demanded the same scope but with a payment of 10% tax.

They also do not want the black money owners facing any questions about their sources of income. 

NBR member Masud Sadiq, who presided over the meeting, said, "When we are criticised for offering the opportunity for black money holders to invest undisclosed money without facing any question, we do not find you beside us," he said.

In FY21, the government offered the wholesale scope for whitening black money through an investment in the capital market and a few other sectors and in the following fiscal year, it had to scrap it in the face of much criticism.

Currently, undisclosed money is allowed for investments in stocks but on condition of paying 25% tax plus a 5% fine.

In another meeting with representatives of the leather sector, NBR Chairman Abu Hena Md Rahmatul Muneem urged the sector to enhance its competitiveness as offering it so many benefits in the long run is not possible.

Md Shaheen Ahmed, chairman at Bangladesh Tanners Association, placed a number of proposals before the NBR regarding reduction or exemption of income tax, duties and VAT.

Mohammad Nazmul Hassan, vice-president at Leathergoods and Footwear Manufacturers and Exporters Association of Bangladesh, demanded halving the existing source tax on exports, reducing source tax on export incentives to 3% from 10%, and permitting footwear companies to import spare parts for manufacturing footwear by blending synthetic and fabrics.