The Board of Directors of Dhaka Stock Exchange (DSE) Ltd yesterday submitted a three-point tax incentive proposal before the government, including tax holiday facility for five years to the country’s premium bourse.
A DSE delegation, led by its president Ahasanul Islam Tito, submitted the proposal before Finance Minister AMA Muhith at his secretariat office.
In the proposal, the DSE stated that after being demutualised on November 21, 2013, at least five years’ tax holiday is needed for the DSE to run the Exchange activities successfully.
The DSE is exempted from income tax on its income as mutualised exchange through SRO No 102-Ain/96-Income Tax Ordinance, 1984 dated June 18, 1996. After demutualisation, DSE’s income will be taxable and currently the DSE suffers its operation losses due to low turnover.
The 2nd proposal of the bourse is to exempt capital gain from the capital gain tax or any other tax as a one-time capital gain will arise at the time of issuance of shares of demutualised DSE to the Initial Shareholders.
It said that each initial shareholder of DSE got 28,86,042 shares as 40 percent of total issued 72,15,106 shares in dematerialized form against the existing one share.
In its 3rd proposal, the DSE demanded exemption of 1.5 percent stamp duty on transfer of DSE dematerialized shares as DSE issued its shares in dematerialized form as per the Exchanges Demutualisation Act, 2013.
According to the Stamp Duty Act 1899, 1.5 percent of the value of the consideration, stamp duty is chargeable of shares in an incorporated company or other body corporate. There is an exemption in the same act of 1.5 percent stamp duty for the transfer of shares of the public limited companies whose shares are listed in the stock exchange.
Responding to their proposals, the Finance Minister said the current interim-government would be able to do necessary works on the tax incentive proposals. “The next government might take decisions to this end.”
While putting forwarding the proposals, DSE President Ahasanul Islam Tito said the way DSE has been demutualised, it would remain as a benchmark to the other stock exchange of the country to be demutualised.
Noting that there are many challenges ahead of the DSE, including making the bond market vibrant, Ahasanul Islam said there is another major problem which is lacking of proper good supply of scripts. “If the multinational companies and the State Owned Enterprises are listed and come in the market, then the depth of the capital market would enhance to a big extent,”
Bank and Financial Institutions Division Secretary Dr M Aslam Alam, DSE Directors Ahmad Rashid Laly and Sheikh Kabir Hossain also spoke on the occasion.
DSE seeks 5-yr tax holiday