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DHAKA: The DSE Brokers Association of Bangladesh (DBA), an organisation representing stockbrokers, has proposed a full tax exemption on capital gains earned by individual and foreign investors from listed securities until 2030 to help restore investor confidence, boost market liquidity and encourage long-term investment.
The DBA submitted the proposal to Finance Minister Amir Khosru Mahmud Chowdhury, Prime Minister’s Special Assistant for Investment and Capital Market Tanvir Shahriar Goni, Bangladesh Securities and Exchange Commission (BSEC) Chairman Masud Khan and National Board of Revenue (NBR) Chairman Ahsan Habib on Wednesday (October 28).
The association disclosed the proposal in a press release issued on Saturday (October 31).
According to the DBA, individual investors currently enjoy tax exemption on capital gains from listed securities up to Tk 50 lakh. Gains exceeding that amount are generally subject to a 15 per cent tax.
The association has proposed reinstating a full tax exemption for individual investors and reviewing the tax arrangements applicable to foreign individual and institutional investors.
It believes the proposed measure could increase trading activity, encourage the reinvestment of profits, promote the productive use of domestic savings and expand equity financing opportunities for listed companies.
Under the proposal, the relevant provisions of the Income Tax Act, 2023, could be amended to exempt capital gains from eligible transactions conducted through stock exchanges and settled through the designated central depository system.
However, the DBA has recommended retaining the existing tax arrangements for sponsors, directors and institutional investors.
The association said the exemption should remain in place until 2030, when Central Counterparty Bangladesh Limited (CCBL) is expected to become fully operational.
According to the DBA, the full-scale operation of CCBL would simplify the calculation of capital gains and the related tax assessment process. It has therefore proposed continuing the exemption until the company is fully operational.
DBA President Saiful Islam said a more investment-friendly tax regime for individual and foreign investors would help restore confidence in the capital market, encourage long-term investment and expand financing opportunities for listed companies.
He said the proposal could also support the government’s plans for developing the country’s capital market.
The DBA has urged the relevant government authorities to give the proposal due consideration and take the necessary policy and legislative measures. It also reaffirmed its commitment to working with the government, regulators and other stakeholders to develop the capital market.