The Bangladesh Securities and Exchange Commission (BSEC) has requested the National Board of Revenue (NBR) to retain an opportunity to invest undisclosed money in the capital market unconditionally with an additional fee of 10%.

This is part of the capital market regulator’s five-point proposal to tax authorities for inclusion in the upcoming budget for the financial year 2022-23.

The government currently allows untaxed money to be invested in the stock market subject to paying a 25% tax and a 5% tax liability penalty.

And such an investment is now subject to the condition of keeping it on the capital market for at least one year.

In February, the Dhaka Stock Exchange (DSE), to facilitate investment of undisclosed money in the stock market, proposed that the tax rate be set at a fixed rate of 5%.

He also wants the continuation of the existing system where no questions are asked about sources of income.

Meanwhile, representatives of the Chittagong Stock Exchange (CSE) have proposed a flat tax rate of 10% for investing black money in stocks.

Other BSEC proposals

To attract good and big companies to the capital market, the commission proposed to maintain a 10% differential in the tax rate for listed and unlisted companies.

Over the current financial year, the tax gap is 7.5% – 22.5% for listed companies and 30% for others.

The BSEC also proposed to raise the ceiling on non-taxable dividend income, to repeal double taxation and to offer coupon bonds the same facilities as zero-coupon bonds.

Currently, capital market investor dividend income is tax exempt up to Tk 50,000. The commission asked the tax authority to increase the limit to Tk1 lakh.

According to the Income Tax Ordinance, any income/interest from the zero coupon bond is exempt.

The commission also proposed to maintain this facility in the case of coupon bonds to rejuvenate the bond market and make it dynamic.