DSE calls for full tax exemption

A man walks past the building of Dhaka Stock Exchange in the capital. Photo: Star/File

The Dhaka Stock Exchange yesterday urged the government to provide a full tax exemption facility for five years, instead of the existing partial exemption at graduated rates, for sustainable growth and smooth operation of the bourse.

The premier bourse, which has been allowed to pay taxes at graduated rates from the current fiscal year, will have to pay 7.5 percent tax on its net profit in fiscal 2015-16.

Under a graduated rate, the bourses will get full tax exemption in the first year of demutualisation, 80 percent tax exemption in the second year, 60 percent in the third year, 40 percent in the fourth year, 20 percent in the fifth year; it will have to pay full taxes then on.

“We want full tax exemption for five years to continue the reforms under the demutualisation scheme and invest further in infrastructure development,” said Swapan Kumar Bala, managing director of the DSE.

Before the demutualisation, stock exchanges were non-profit cooperatives owned by the exchange members, and were not subject to corporate tax.

But with the demutualisation, a way of separating the bourse management from ownership, the bourses were converted into profit-oriented companies in November 2013, owned by shareholders, and 35 percent corporate taxes apply to them as non-listed companies.

Addressing a post-budget press meet at the DSE office, Bala also urged the government to pass the Financial Reporting Act, and form and implement the financial reporting council under the law to ensure transparency and accountability in the stockmarket.

“We hope the government will also continue the 10 percent tax waiver for the companies that declare dividends of 30 percent or more,” he said. Terming the proposed budget market-friendly, Bala said the corporate tax cut for listed companies will encourage the non-listed ones to raise capital from the stockmarket.

Meanwhile, DSEX, the benchmark index of the Dhaka bourse, gained 26.27 points or 0.57 percent, finishing the first day of the week at 4,617.7.

The turnover, another important indicator of the market, also rose 29.85 percent to Tk 648.32 crore on transactions of 16.81 crore shares and mutual fund units.

The market started the day bullish after a capital market-friendly national budget proposed on Thursday, said LankaBangla Securities.

“But later, the market could not maintain the buying spree as investors became cautious,” the stockbroker said.

Of the traded issues, 146 advanced and 117 declined, with 49 securities remaining unchanged on the premier bourse.

Summit Power dominated the turnover chart with 1.07 crore shares worth Tk 51.23 crore changing hands, followed by Beximco, Khulna Power Company, Beximco Pharma and Bangladesh Submarine Cable Company.

Pioneer Insurance was the day's best performer, advancing 9.96 percent, while Meghna PET Industries was the worst loser, slumping 6.66 percent.

Chittagong stocks also rose yesterday with the bourse's benchmark index, CSCX, increasing 26.79 points to 8,633.95. Gainers beat losers as 118 scrips advanced and 91 declined while 34 closed unchanged on the Chittagong Stock Exchange.

The port city bourse traded 2.18 crore shares and mutual fund units, generating a turnover of Tk 76.15 crore.