NBR seeks ways to get tax on capital gains from stocks
The tax authority will sit with stockmarket stakeholders to find ways to implement the provision of at-source tax on capital gains made by institutions.
Although a provision for 10 percent tax at source on capital gains has been imposed this fiscal year, it is yet to be implemented due to the complexities that arose in implementation.
The National Board of Revenue will sit with top executives or representatives of Dhaka and Chittagong bourses, Bangladesh Securities and Exchange Commission, Central Depository of Bangladesh and DSE Brokers Association of Bangladesh to resolve the issue.
Custodian banks or merchant banks or financial institutions or Trading Right Entitlement Certificate (TREC)-holders are supposed to deduct the 10 percent tax on realised gains derived by any company or firm from share investment.
However, stakeholders found it difficult to implement the provision due to unavailability of actual information on net profits of the companies.
The Dhaka Stock Exchange in a recent budget proposal asked the finance ministry to withdraw the provision, stating that such a deduction is not possible on part of the TREC holders.
It would not be possible to collect necessary information including realised gain and acquisition costs if linked accounts are maintained in different places, the DSE said.
Also, TREC holders will not be able to calculate capital gains after adjusting the previous five years' capital loss, the premier bourse said. Moreover, most of the TREC holders do not have that capacity for the task, it added.
If investors sell their shares in the middle of the year as well as withdraw their money, or a negative balance occurs, it again makes the tax deduction issue cozmplex.
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