‘Bring undisclosed money back to mainstream economy’

The country will reap the benefits of undisclosed money once it is brought back to the mainstream economy, experts have said.

The observation was made at a discussion on ‘Budget 2022-13: Capital Market Perspective’ jointly organsied by the Capital Market Journalists Forum (CMJF) and the Bangladesh Merchant Bankers Association (BMBA) in Dhaka on Wednesday.

They also urged the government to take measures in providing the scope for legalising the undisclosed money in the capital market in the new fiscal year starting from next month.

Speaking at the event, BMBA President Sayedur Rahman said undisclosed money will play an important role in the economic development of the country, if black money whitening facility is given one more year in the capital market.

In response, State Minister for Planning Shamsul Alam said, “Bringing back the undisclosed to the mainstream economy is good for the country.” 

“The government is very sincere in developing the capital market as it wants a vibrant stock market. To make the stock market more dynamic, listing of big companies and more people’s participation are required,” he said. 

To encourage the big companies to list, the BMBA president recommended reducing the corporate tax to 15 per cent for listed companies.

As per the existing rules, listed companies, other than banks, insurers, financial institutions, tobacco companies, and telecom operators, pay corporate tax at a rate of 22.5 per cent, compared to 30 per cent for non-listed companies.

On Thursday, Finance Minister AHM Mustafa Kamal proposed cutting the tax rate to 20 per cent from the existing 22.5 per cent for listed companies that issue shares worth more than 10 per cent of their paid-up capital through an initial public offering (IPO).

The BMBA also proposed reducing the corporate tax rate for non-listed companies from 30 per cent to 27.5 per cent.

The BMBA urged the government to cancel the double taxation on dividends. “This discourages capital market investors. Withdrawal of double taxation on dividends will reduce market volatility and attract new investors.”

It also advocated for lowering the Advance Income Tax on securities trading from 0.05 percent to 0.015 percent.