DSE urges govt to drop capital gains tax for individuals

The Dhaka Stock Exchange (DSE) has urged the government not to impose a capital gains tax on individual investors in the forthcoming budget. The call was made today during a pre-budget press conference held at the Dhaka Club.

Prof Dr Hafiz Md Hasan, Chairman of the DSE, emphasized the detrimental effects of the COVID-19 pandemic and ongoing global conflicts on stock market investments. The market needs additional facilities to invigorate investor confidence, Dr Hafiz stated.

The DSE board of directors, present at the conference, highlighted the importance of the capital market, which supports the livelihoods of about 1 crore people in Bangladesh.

Dr Hafiz stressed the need for governmental financial policies that ensure the long-term stability of capital markets, particularly in a globalized economy.

The DSE outlined five critical demands for the FY 2024-25 budget:

1. No new taxes on the capital market.
2. Reduction of withholding tax on brokerage house transactions.
3. A corporate tax gap of at least 20 per cent between listed and unlisted companies.
4. Dividend income up to Tk 50,000 to be tax-free.
5. Complete tax exemption on bond income.

 
Dr Hafiz highlighted that 90 per cent of investors in the stock market are institutional investors, who currently face a 5 to 10 per cent tax on capital gains.

The remaining 10 per cent are individual investors. If individual investors are taxed on capital gains, it will negatively impact the market, he warned.