Investors want capital market friendly budget

There has been a situation like recession in the capital market for a long time. Various effective measures adopted by the capital market regulatory body in order to overcome this situation, seem not working. In such a situation, investors and stakeholders are expecting policy support by fixing proper strategies in the proposed budget of the upcoming fiscal year 2024-25 to bring stability and increase dynamics in the capital market.

Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), Bangladesh Merchant Bankers Association (BMBA) and DSE Brokers Association of Bangladesh (DBA) have already made several recommendations and demands to the National Board of Revenue (NBR). According to them, if these recommendations and demands are implemented, the upcoming budget will be capital market friendly.

Meanwhile, business organizations including DSE Brokers Association of Bangladesh (DBA), an organization of brokerage houses, sought an intervention from Prime Minister Sheikh Hasina in the vulnerable situation of the capital market. However, in the meantime, the Prime Minister has given instructions to strengthen the capital market. Investors and stakeholders have started dreaming following her instructions.

On Thursday (June 6), Abul Hassan Mahmood Ali will present the proposed budget for the fiscal year 2024-2025 in the National Parliament. This will be his and the incumbent government’s first budget as finance minister. This budget session will be the third session of the 12th National Parliament. This government came to power for the fourth consecutive term through national elections on January 7, 2024.

Dhaka Stock Exchange has made five recommendations in the proposed national budget for the upcoming fiscal year 2024-25 to maintain the stability of the capital market and protect the interests of investors. The recommendations include no new tax on capital gains from securities trading in stock exchanges, difference in corporate tax rate between listed and non-listed companies from 10 to 12.5 percent, withholding tax on transactions of stock exchange member brokerage houses, treating tax on dividend income at source as final settlement and exemption from tax up to the first fifty thousand Taka of dividend receipt and exemption from tax on income or interest earned from listed bonds.

Meanwhile, Chittagong Stock Exchange has also placed several proposals in the upcoming proposed budget. These are - increasing the corporate tax rate gap between listed and unlisted companies by at least 10 percent, tax exemption on income arising from bonds, providing tax concessions to blue bonds and green bonds with full tax exemption, elimination of double taxation on dividends, tax withdrawals on capital gains of institutional investors, increasing tax concessions on collective investment schemes like mutual funds and ETFs, treating capital gains tax as final tax if deducted, granting tax exemption for 1, 2 or 3 years to companies on Alternative Trading Board and Small Cap Board, withdrawal of all taxes on hardware and software and tax exemption for five years to commodity exchanges.