The country’s two bourses—Dhaka Stock Exchange and Chittagong Stock Exchange—were unhappy with the proposed new budget that failed to meet their demands fully.
“Our demand was not taken into account fully,” said DSE Director Shakil Rizvi while giving formal reaction to the budget on the DSE premises yesterday.
Finance Minister AMA Muhith on Thursday unveiled the proposed national budget for the next fiscal year beginning from next month in the Parliament.
However, the budget has allocation for infrastructure development, which will help make the stock market vibrant.
DSE Chairman Siddiqur Rahman Miah urged the government to re-consider at least two of their demands to bring dynamism to the stock markets.
The two demands include giving a five-year tax holiday for the post-demutualised stock exchanges and cutting tax at source on TREC holders’ share transaction to 0.015% from the existing 0.05%.
Later in the afternoon, CSE in its reaction called for re-consideration of its budgetary proposals. It also sought policy support to bring back confidence in the stock market.
“The stock market is now passing a hard time. So, it needs some short-term and long-term incentives to restore confidence,” said Saifur Rahman Mazumder, newly appointed managing director of CSE.
Other than the above two demands, the DSE and CSE put forward a number of proposals for re-consideration, including raising the tax-free dividend income to Tk1 lakh from the existing Tk25,000, withdrawal of stamp duty provision during transferring shares of demutualised stock exchange, bringing change to the definition of earning year and lowering corporate tax to 32.5% for listed banks, insurances and financial institutions and 37.5% for non-listed firms from the present 42.5%.
The national budget for the financial year (FY) 2016-17 has proposed no changes to existing tax provisions for the capital market.
The finance minister, however, has proposed to waive income tax charged on margin loans, including interests, up to Tk10 lakh for small investors.